Posted: 11 January 2015 by Higgins Homes
With a fresh year now under way, all eyes are turning towards the future of the property market in 2015 and what events and trends we're likely to see over the next 12 months. 2014 was certainly something of a lively year for the UK market so many are hoping that in 2015 things will be calmer. But what can we actually expect from the next 12 months?
The first major point to note is the introduction of stamp duty reform. The former 'slab structure' of stamp duty meant that a property was taxed on the entire purchase price depending on the band it fell into (so, for example a property valued at £250,001 would be taxed at the higher rate of 3% rather than the 1% for £250,000 value). Now, the tax is applied to the proportion of the property price that falls within the specific band, which the government estimates could mean savings of around £4,000 for the average homebuyer. This could well result in more movement in the market, as well as the flexibility to pay a little more for a property without triggering a huge increase in the applicable tax percentage.
In general, house prices in the latter part of 2014 cooled somewhat and, although property values were still moving in an upward direction, the movement was far below what we saw at the start of the year. Most market insiders are predicting that house prices will continue on this upward trajectory but at the same slower rate, making the market less frenetic for everyone involved. House price growth of around 2% is expected for 2015, which is much more in line with earnings growth. For those based in London, this is where property values remain at their highest, and where the most significant house prices have been recorded, and are likely to be recorded, over the coming 12 months.
Increases in property values in London were around four times the national average last year, making the capital one of the soundest investment prospects, albeit one of the most expensive in terms of initial out lay. With stamp duty reform potentially making buying a property less expensive in 2015 and existing schemes such as Help to Buy offering considerable assistance to get onto the housing ladder (or move up it) it looks like 2015 could be another great year for property buyers and sellers in the UK.