London property boom is over - for now
Uncertainty surrounding May's general election will stifle an already slowing housing market, estate agency Winkworth has warned.
Since this year's first-quarter spike, the housing market has cooled, which Winkworth blames on the upcoming election, stricter lending requirements as a result of the Mortgage Market Review, and the impact of the strong pound on international buyers.
"Uncertainty in the run up to the election has been most apparent at the top end of the market as a result of concerns over a mansion tax and new measures impacting overseas buyers," the company says.
South East to benefit
Central London's slowdown is set to continue next year, with a 5% fall in house prices forecast for the first half, but an uptick at the second half could leave prices flat on 2014.
And while suburban London will also continue to slow as supply and demand is rebalanced, the South East will benefit from those in London relocating, with prices set to rise by 3% by the end of 2015.
And delays to an interest rate rise should help buoy the middle market by keeping mortgage costs low. Although activity is set to be flat this year, next year should see an uptick.
Rental prices should rise further thanks to improving employment and wage inflation, Winkworth added.
This article was written for our sister website Money Observer
An increase in the general level of prices that persists over a period of time. The inflation rate is a measure of the average change over a period, usually 12 months. If inflation is up 4%, this means the price of products and services is 4% higher than a year earlier, requiring we spend and extra 4% to buy the same things we bought 12 months ago and that any savings and investments must generate 4% (after any taxes) to keep pace with inflation. Since 2003, the Bank of England has used the consumer prices index (CPI) as its official measure of inflation (see also retail prices index).
Everything you own: all your assets (property, cars, investments, savings, insurance payouts, artwork, furniture etc) minus any liabilities (debts, current bills, payments still owed on assets like cars and houses, credit card balances and other outstanding loans). When you’re alive this is called your wealth; when you’re dead, it becomes your estate.