Many property and mortgage experts predict that property prices could rise, boosted by radical reforms to stamp duty announced in the Autumn Statement.
The changes mean that anyone buying a property costing £937,500 or less either will pay less in the property tax – or the same amount as they would have previously.
We’ve rounded up our favourite experts to get their view on where house prices are headed for in 2015.
David Hollingworth at London and Country mortgage broker, partners of MoneySuperMarket
2015 forecast: 5 to 7% rise
“Last year ended on a more muted rate of house price inflation after some very strong growth earlier in the year, particularly in London and the South East. Mortgage rates remain very low and changes to Stamp Duty will also bring buyers to the market sooner than they may have previously been able to. On the flipside though, the uncertainty of a general election may affect confidence.”
"Tougher mortgage rules will prevent a return to excessive borrowing which will help hold the market back, but given the continued imbalance in supply and demand, it’s hard not to see house prices rising again this year.
“As ever, there will still be plenty of regional variation but price rises could continue to rise at around 5 to7%. If the market picks up quickly in the New Year it could be higher.”
Miles Shipside, director and housing market analyst at Rightmove
2015 forecast: 4% to 5% rise
“Our forecast for 2015 is that the price of property coming to market will rise by between 4% and 5%. This upwards price pressure will be driven by a shortage of property for sale in popular locations as stricter lending criteria, pre-election jitters and limited choice of ‘trade-up’ properties dissuade some homeowners from coming to market .
“Buyer sentiment will be aided by continuing low interest rate environment and boosted by stamp duty reforms.
“Buyers could find early 2015 offers ‘best buy’ opportunities—properties falsely priced below former stamp duty thresholds might offer tempting value.”
Mark Harris, chief executive of mortgage broker SPF Private Clients
2015 forecast: Rise of around 2%
“As far as the housing market is concerned, very little is likely to happen in 2015 until the general election is out of the way.
“The uncertainty surrounding the election could mean the market continues to stagnate in the early part of the year, carrying on from where it left off at the end of 2014. This is particularly true in the £2m-£3m bracket where fears of the introduction of a mansion tax are causing would-be buyers to sit on their hands.
“However, once the election outcome is known, we expect the housing market to be buzzing as all the pent-up demand from the start of the year is released.
“Following considerable growth in prime central London property values, 2015 will be more subdued with a 0.5% fall in prices. Prices across the mainstream UK market are likely to see a slight uplift – an average of around 2%.”
Martin Ellis, housing economist at Halifax
2015 forecast: Rise of 3 to 5%
“A further moderation in house price growth is likely in 2015 as supply and demand become increasingly better balanced.
“The prospect of higher interest rates at some point in the year and reduced affordability are expected to be key factors curbing housing demand. A looming general election next May could also raise uncertainty, resulting in a lull in activity in the early months of the year.”
“Despite these downward pressures, housing demand should be supported by continuing economic recovery, growth in employment and still low mortgage rates. Overall, house prices national are expected to increase in a range of 3-5% in 2015.”
Robert Gardner, chief economist at Nationwide Building Society
2015 forecast: No specific %
“While the pace of house price growth has moderated in recent months, activity has slowed more sharply, with the number of mortgages approved for house purchase falling to their lowest level for 16 months in October.
“The slowdown in housing market activity is surprising given further steady gains in employment, a pickup in wage growth (albeit from low levels) and the continued low level of mortgage rates.
“If the economic backdrop continues to improve as we and most forecasters expect, activity in the housing market is likely to regain momentum in the months ahead.
“There are encouraging signs that construction is starting to pick up. Hopefully, this will set the stage for house price growth gradually converging with income growth in the quarters ahead.
“Recent changes to Stamp Duty may also have a modest positive effect on demand, especially in the South of England and Scotland.”
See how well the experts did in forecasting last 2014’s house prices!