As far as the property market goes, 2015 was dominated by politics. The year started in trepidation of the May election outcome and ended with bewilderment that the supposed best case scenario of an outright Tory victory has proven likely to be more painful than a victory by Ed Miliband’s Labour party
Despite the Government facing little in terms of true opposition and thus having the supposed freedom to do as they will, the Tory party is far from behaving as one might have expected. Much is made of the Chancellor’s austerity measures, yet the national debt keeps rising and he flunks the truly tough decisions on welfare etc. With cuts in spending only able to go so far, it comes as little surprise that the rich (a precise definition open for some debate) would be paying more through increased taxes as illustrated here.
2014 has seen a very clear shift in focus from prime London to secondary London and beyond. An unexpectedly robust pick up in the UK economy has been translated in to a surge in confidence for the broader housing market. With the Government’s Help to Buy scheme having kick started much of this last year, the UK housing market has seen around 10% growth in prices since last summer (Nationwide today report 11% August to August).
The momentum looks likely to carry through this year but with base rates set to rise most probably in early 2015 and the Government’s efforts to prevent an overheating market (MMR rules etc.) the signs point to price rises at a more moderate level in the near term but most likely back to their long term, pre GFC average of around 5-6% pa over the next 4-5 years.