What does 2015 hold for our local property market?
PUBLISHED: 00:00 08 January 2015
Following a long and steady period of recovery post the 2007 property crash, 2014 saw prices increase between 5% and 10% and so we ended the year on a very positive note, says John Halman, of Gascoigne Halman.
London and the South East tend to grab most of the headlines in terms of the soaring property market but the South Manchester and Cheshire market has always held its own. Indeed, when speaking to my peers from across the UK, I often find that Gascoigne Halman’s average house price exceeds those in all parts of the country apart from London and the immediately adjoining counties.
One interesting and pleasing aspect of 2014 is that the market continued to support high levels of sales right through November and into the early part of December, when things traditionally become quieter. This confirms what we have long known – that housing remains a highly sought after commodity and is often treated as a haven for savings and pensions.
This confidence has resulted in us seeing a growth in the number of private landlords entering into the Buy to Let market where returns can exceed those found in banks and building societies and where the investment is deemed as safe as houses! Like all investments it is not without an element of risk, but anybody who looks back in history will see the long term average is inevitably upward. Rents too have continued to edge upwards as demand outstrips supply.
A boost to the market was received late in the year with the Chancellor’s surprise announcement in the Autumn Statement that he was overhauling the stamp duty rules. Buyers now pay the rate of tax on the part of the property price within each tax band instead of paying tax at a single rate on the entire price. Buyers of homes worth less than £937,500 now pay less tax and this is good news for the majority of our clients.
Early predictions suggest that this will have a beneficial effect on the number of transactions next year and some pundits are arguing that it may add between 1% and 2% to average prices.
So, what does 2015 hold in store? Well, we need to factor in that it’s an election year which inevitably brings with it a degree of uncertainty and nervousness which can be reflected in the market.
Overall, however, we remain encouraged that the Chancellor’s changes will provide a boost to activity. In addition, the bank rate is likely to remain at its current level of 0.5% for the majority of 2015 with some forecasters now predicting no change before 2016. This has resulted in a progressive lowering of the rate of interest of fixed term mortgage deals with some five year fixed products as low as 2.6% and this will also serve buyers well.
We therefore look forward with continued optimism to the coming twelve months.
John Halman is Managing Director of Gascoigne Halman, an estate agent with eighteen offices in South Manchester, and is the North West Regional Residential Spokesman for the Royal Institution of Chartered Surveyors.