London House Prices – Have We Reached a Turning Point?
- November 7, 2014
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Latest predictions are that the recent surge in house prices will not continue into 2015. Property experts, and leading practitioners in the field such as AV Rillo, now believe that prices are likely to fall next year, although a sudden crash is not expected.
What do experts such as AV Rillo say about 2015?
In a report recently published, the Centre for Economics and Business Research (CEBR) predicted that, after rising by an estimated 7.8 per cent in 2014, average house prices across the UK will dip by about 0.8 per cent next year.
Experts – is this the end of the current house price boom?
Nationwide, which is the country’s biggest building society, reported the first drop in house prices in seventeen months in September. Meanwhile the Bank of England reported that mortgage approvals for house purchases fell for the second month running in August.
According to the Centre for Economics and Business Research, affordability has become a real issue for AV Rillo clients and others in the more expensive areas of the country, such as London. The CEBR says that buyers are now starting to resist the unrealistically high prices being asked even for modest properties in the capital and other parts of the South-East.
Changes to the mortgage eligibility rules
Industry insiders such as AV Rillo believe that new rules on the way mortgage customers have to be assessed are also a possible factor in slowing down the housing market. The new rules, known as the Mortgage Market Review, came into effect in April, and were introduced to ensure that borrowers such as AV Rillo clients are issued with mortgages they can afford.
The RICS and a cooling London market
The Royal Institution of Chartered Surveyors’ July survey of its members found that they now expect values to increase at a faster rate outside London than within the capital.