UK Property Market Softens in Summer

Mainstream house prices in England and Wales will end the year up 8.5 per cent and will then rise by 5.5 per cent in 2015, despite a softening in the market as summer ends.

That is the view of Hamptons International which is warning that – despite relatively strong price rises – affordability constraints are biting and both buyers and sellers’ expectations of future price growth are moderating.

It also says that with the approaching general election there is caution at the higher end of the market and this will mean 2015 price growth will be below this year’s.

There is still a clear divide between the South of England and elsewhere in the country with price growth expected to remain more subdued in the north and Midlands.

Prices in Greater London are forecast to rise by 15.5 per cent in 2014 and three per cent in 2015 while in the south they are expected to grow eight per cent this year and 6.5 per cent next year.

Despite the pessimistic tone of the Hamptons announcement, these forecasts are slightly higher than those from some other rival agents. Last winter, Hamptons forecast that mainstream house prices in England and Wales would increase by six per cent in 2014 and by 24 per cent in the next five years, while prices in central London would grow most strongly in 2014 at eight per cent and by 32 per cent over five years.