HOUSE price increases across the UK are set to outperform those in London for the first time in six years, housing analysts predict.
The Centre for Economics and Business Research (CEBR) said it expects UK house prices generally to increase by 1.5 per cent during 2015, while property values in London fall by 3.6 per cent following “years of over-performance”.
This would be the first time since 2009 that prices across the UK have held up better than those in the capital. But the predicted London price dip will not last for long and by next year is expected to have pulled back ahead of the rest of the UK once more. Property values are expected to increase by 2.7 per cent in London and by 2.3 per cent across the UK generally in 2016.
The CEBR said that the London housing market tends to be particularly affected by the uncertainty of the outcome of the General Election, but in the longer term, underlying factors such as economic growth and a lack of housing for buyers to choose from will push prices upwards.
In January, the CEBR said UK house prices would fall by 0.6 per cent this year, but it has revised its prediction upwards, saying that changes to stamp duty in December have been felt sooner than expected, with buyers able to put the cash they have saved on stamp duty towards their deposit.
As the housing market recovery took off in 2014, house prices in London increased by 17.4 per cent, while property values across the UK generally increased by 10 per cent.
London has been a driving force behind the housing market pick-up, but towards the end of 2014, experts started to report a more evenly-balanced housing market across the country, with price pick-ups rippling out to other areas as buyers started to look for value elsewhere.
There was also a growing mood of caution, as toughened industry-wide mortgage lending rules came into effect and house hunters showed signs of becoming less willing to meet asking prices.
Meanwhile, Aberdeen has bucked the trend for rising rental costs as the city adjusts to the collapsing price of oil, according to a new report.
Research by Lettingstats, the research arm of letting agent Lettingweb, found the average advertised monthly rent for a two-bed property across Scotland was £654 in the quarter December to February, up 6.8 per cent on the same time a year ago.
In Edinburgh the average cost was £784 per month, up 5.3 per cent year-on-year, while rents in Glasgow went up 6.5 per cent to £665 a month and Dundee saw a rise of 3.6 per cent to £565. But in Aberdeen, the average rent of a two-bed property fell by 1.2 per cent to £972.
The report said: “All eyes have been on the Aberdeen economy since the dramatic collapse in oil prices and it is fair to say that the rental market does seem to have adjusted accordingly.
“Advertised rental volumes are always lower during the winter, however, the average rent for a three-bed property was £1,216, down 7.2 per cent on same period a year ago.
“Time will tell if these are temporary or part of a more significant re-adjustment of the Aberdeen housing market.”
Why are you making commenting on The National only available to subscribers?
We know there are thousands of National readers who want to debate, argue and go back and forth in the comments section of our stories. We’ve got the most informed readers in Scotland, asking each other the big questions about the future of our country.
Unfortunately, though, these important debates are being spoiled by a vocal minority of trolls who aren’t really interested in the issues, try to derail the conversations, register under fake names, and post vile abuse.
So that’s why we’ve decided to make the ability to comment only available to our paying subscribers. That way, all the trolls who post abuse on our website will have to pay if they want to join the debate – and risk a permanent ban from the account that they subscribe with.
The conversation will go back to what it should be about – people who care passionately about the issues, but disagree constructively on what we should do about them. Let’s get that debate started!
Callum Baird, Editor of The National
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules here