UK-wide property prices set to outstrip London

The Centre for Economics and Business Research (CEBR) has said that house prices outside London are likely to outperform those in the capital in 2015 for the first time in six years.

UK house prices are expected to rise by 1.5 per cent this year, while values in London fall by 3.6 per cent.

CEBR said that the London housing market tends to be particularly affected by the uncertainty of outcome surrounding the general election, where the average house now costs more than £500,000.

According to Nina Skero, CEBR economist and author of the report, the improvement in property prices outside of London comes just as the market appeared to be “coming off the boil”. Skerko also explained that the surge in prices could be a result of the changes to stamp duty that were put in place in December, which made the tax cheaper for the majority of house buyers liable to pay it, as well as rising household incomes.

Fewer new buyer inquiries and properties taking longer to sell are an indication of prices set to cool down in London. It was also reported by the Telegraph that the changes to stamp duty on homes more than £937,500, coupled with the prospect of a Mansion Tax on the occasion of a Labour election win have also hit demand from buyers in the capital.

However, the predicted dip in London prices will not last long. According to the Telegraph, the cost of London housing is expected to forge ahead in 2016, increasing to about 2.7 per cent compared with 2.3 per cent across the country generally.