Real Estate Investor Magazine South Africa February 2015 | Page 60

UK PROPERTY

BY MIKE SMUTS

What lies ahead for

London
property in 2015?
House prices in London are
predicted to remain unchanged

A

t the beginning of the New Year there is often
much speculation as to what will happen with
the London housing market during the year

ahead.
Average house prices of £501,000 still stand above
the UK average of £271,000. No region in the UK
recorded higher year-on-year growth than London.
Interest Rates
On the 8th of January 2015, The Bank of England kept
UK interest rates unchanged at their historical low of
0.5%. This means the UK will enter its seventh year of
record low interest rates, which was slashed to 0.5 per
cent in March 2009, and a rise in interest rates in 2015
is looking less likely after a sharp decline in the rate of
inflation at the end of 2014.
Tax Changes
In a pre-election giveaway, Mr Osborne reduced the
burden of stamp duty on buyers in the mainstream
housing market when he switched the old slab system
to a new graduated one, proclaiming that “Stamp duty
will be cut for 98% of people who pay it.” This will
lighten the tax burden for buyers.
“The changes to stamp duty are expected to provide
a timely boost to activity in the housing market across
most of the country, but there remain significant
challenges, particularly for first-time buyers seeking
to take an initial step on to the property ladder,”
said Simon Rubinsohn, chief economist at the Royal
Institution of Chartered Surveyors (RICS).
However, H