Prices will be up 8.5pc by 2014 end

Ryan Fowler

August 11, 2014

The agents said there is still a clear divide between the South of England and elsewhere in the country with price growth expected to remain more subdued in the North and Midlands.

And 2015 should see a continuing slow down in price growth across the country as interest rates rise, expectations of future price gains adjust and affordability constraints bite.

Prices in Greater London are forecast to rise by 15.5% in 2014 and 3% in 2015 while in the South they are expected to grow 8% this year and 6.5% next year.

Fionnuala Earley, director of residential research at Hamptons International, said: “The rate of house price growth so far in 2014 has been a little higher than expected.

“Prices have been driven largely by London and the South East, but a change in sentiment over the rate of future price growth has affected the whole of the country and we expect that to result in a moderation in house price growth next year.

“Despite a strengthening economy, there is now evidence of a change in sentiment across the country brought about by increasingly strong messages from the Bank of England culminating in the implementation of more stringent affordability regulations (including the introduction of the Mortgage Market Review).

“In addition a recognition that interest rates will begin to rise before too long has led both buyers and sellers to moderate their expectations of future price growth. This is at a time when the financial position of many households is still stretched as real wages have been falling for five years.”

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