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Housing market cools in October

Sarah Davidson

November 28, 2014

Average house prices are still edging towards their peak of £181,269 in November 2007, standing at £177,377 in October 2014.

The East saw the greatest monthly rise of 1.6%, while the North East saw a monthly price fall of 2.7%.

Brian Murphy, head of lending at Mortgage Advice Bureau, said: “The Land Registry figures suggest the house price recovery continued to hold strong in the October, with annual comparisons proving the market has come on in leaps and bounds compared to this time last year.

“First-time buyers will take some comfort from the fact that the growth rate has noticeably slowed in recent months as the effects of the Mortgage Market Review have begun to kick in.

“This has introduced a more relaxed tempo into the housing market, allowing for recovery without negating affordability.

“Consumer demand also remains strong despite the more stringent affordability checks imposed by MMR, indicating a positive outlook for the rest of 2014.”

In London prices have risen by 18.6%, while at the other end of the spectrum prices in Wales have risen by just 2.0%.

The number of properties sold for over £1m in England and Wales has increased by 15% year-on-year in August from 1,185 to 1,363.

Peter Rollings, chief executive of London-based estate agents Marsh & Parsons, said: “Fears of a potential mansion tax could contaminate demand for prime property in the run-up to the general election.

“Uncertainty surrounding this and the possibility of other populist wealth taxes is putting off all buyers be they overseas or home grown, for whom Prime London property usually commands global appeal as a gold-standard asset.

“This could be a worrying development for London’s reputation as a business hub and natural outlet for investment, and could spell trouble beyond the capital if this lack of confidence at the highest rungs trickles down the housing ladder to the wider market.

“It is safe to say that ears will be pricked during Osborne’s Autumn Statement next week, and all parties need to be wary of quashing the intrinsic momentum of the property market.”

But Guy Meacock of buying agency Prime Purchase added: “Those who believe in the long-term fundamentals of London won’t be swayed.

“Even if a mansion tax is introduced, we will be shifting from a benign tax system to one more in line with other cities in the world.”


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