London house price boom set to stall in 2015 as tough new mortgage lending rules take effect
House price growth is set to level off across the UK and could even be at risk of falling in the capital, according to industry experts.
“It’s been indicated by the collapse in buyer in inquiries, there’s been a very sharp fall in London,” Joshua Miller, economist from the Royal Institution of Charted Surveyors, told Morning Wire
Buyer enquiries have been falling since July and growth in enquiry numbers had slowed in the 12 months prior to July.
“The reasons behind it are stretched affordability, new mortgage market rules coming in and constant rhetoric from the Bank of England.”
April saw the introduction of tough new rules on mortgage lending.
Meanwhile, regulators have been considering imposing caps on loan-to-value ratios.
“For the UK as a whole, we’re likely to see the year-on-year growth rate come down substantially by the end of 2015 – to low single digits,” Miller said.
“In London, year-on-year growth rates could be close to zero by December 2015, with risks skewed to the downside.”
Survey data released today by Halifax showed consumer sentiment on the outlook for house prices had dipped.
“Confidence [in the outlook for the housing market] has fallen to its lowest level in 12 months,” said Craig McKinlay, mortgages director at mortgage lender Halifax.
The prediction comes after the Centre for Economic and Business Research predicted a 0.8 per cent fall in house prices in the capital in 2015. They saw a strong pound hitting foreign demand.
Data released yesterday by the Office for National Statistics showed that house price growth was strong over the summer, growing by 11.7 per cent in the year to August.
However, more up-to-date figures from Halifax and Nationwide show activity slowing.