Annual growth is forecast to be strongest (5%) in Outer Prime London, where typical house prices are 25% lower than across Prime London as a whole, fuelling higher demand. But in the most expensive Prime Central areas of the capital, prices will climb by 3%.
However Marsh & Parsons added that they expect mortgage rates to remain competitive in 2015, presenting a good opportunity for buyers as well as sellers.
Peter Rollings, CEO of Marsh & Parsons, comments:
“The London housing market gave a stellar performance in the first half of 2014, but there won’t be quite the same encore next year. However, the curtain certainly isn’t going down on price growth. After touching the brakes in recent months, property values will continue to climb steadily again in 2015 – albeit at a more modest and orderly pace.
“Demand for Prime London property remains stable, and after adapting to the MMR changes and tighter affordability measures introduced this year, buyers are more motivated than ever – maintaining sales momentum and ensuring that property prices will not stand idle. The general election will act to stimulate the market, removing much uncertainty and drawing a line under any hesitation from buyers and sellers, but this isn’t to say that the first five months of the year will be a write-off as London won’t stop working.
“With an array of attractive mortgage products on the market, and many homeowners tied into existing deals, an interest rate rise towards the latter end of 2015 is unlikely to cause any seismic shifts in the property landscape. Even after a lift, interest rates will still remain remarkably low, and the primary preoccupation for buyers will not be interest rates, but accessing competitive mortgages – which government initiatives have been making much easier.”
