House Price Growth: Ahead of the Election…
Taxation is likely to be the key issue affecting the prime housing markets in 2015.
It has been encouraging to see politicians deal with the reform of stamp duty in the Autumn Statement 2014. However, it is one small part of a much bigger jigsaw that requires more political and economical consideration.
According to Savills there were recorded 18,000 of £1m + sales in 2014 across the UK. Little surprise that it is a submarket that has grabbed the attention of politicians across all parties looking for ways to raise tax revenues. The Labour party proposal for a mansion tax is still hovering, and makes political debate around further taxation even more contentious.
Also the most important of the resent constraints of price growth was the introduction of stricter mortgage affordability testing by the Bank of England. This will be the reason for house price growth being limited by income growth in mortgage dependant markets.
Overall, although the news coming out of the housing market appears to be turning slightly negative ahead of the election, buyers should be able to take comfort from the medium term outlook for the market, which remains broadly positive – if to rely on Savills report dated February 2015 the forecast for mainstream UK price growth over the next five years is 19.3%.
