Recent predictions from the Centre for Economics and Business Research (CEBR) suggest that average property prices across the UK will fall by 0.8% next year, after growing by approximately 7.8% in 2014. So is this finally a “turning point” for the housing market?
However, Scott Corfe of CEBR claims that this dip in prices will by no means be a crash. Instead, the market is “adjusting” after getting ahead of itself at the start of this year. Affordability has become an issue recently, especially in the capital where many buyers are starting to be put off by the hefty price tags of many London homes.
The CEBR is not the only organisation to issue a report on the cooling housing market. Last month, Nationwide also reported the first fall in property prices in 17 months, which takes the average house price to £188,374.
Corfe believes that new mortgage rules, which came into play in April this year, could be a possible factor for taking the steam out of the UK property market, saying that “tougher mortgage eligibility criteria, high deposit requirements and concerns about future rate rises” could all be playing a part.
Mark Carney, the Bank of England governor, has suggested that the first rise in interest rates will come by next spring. It is said that the rates will go up in “baby steps”.
One thing’s for sure; we won’t be seeing a crash – just a little cool down.