UK house price rises for 2014 almost twice as high as predicted
UK house prices will end the year 9.5% higher than they started it, but the strength of increases this year means that in London the market could flatline in 2016, property firm Savills said on Tuesday, as it revised its forecasts for the next five years.
The firm had predicted a 6.5% increase in prices across the country in 2014, but said that growth had “exceeded all expectations”. As a result it has revised up its forecast for the current year, and its prediction of total growth by the end of 2018 to 25.7% from 25.2%. Its five-year forecast assumes mortgage rates will have risen to an average of 5% by 2018.
In London, where the major house price indices all showed annual growth of around 20% at the start of the summer, Savills said it expected the rate over the year to hit 15%, far in excess of the 8.5% it had originally forecast.
However it said strong growth this year has left less capacity for further mid-term growth in some markets. Despite this year’s strong performance, it has left the five-year forecast for London unchanged, at 24.4%, and revised down that for and the wider south-east from 31.9% to 31.6%.
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