Experts predict a fall in house prices in London this year<\/em><\/p>
Property prices in London are actually twice as high as the UK average. After the crisis, a trend emerged: price growth in the capital's market outpaces the overall national trend.<\/p>
The market fully recovered in 2014, experts acknowledged: then housing in London, amid booming demand and record sales, rose by 17.4%, while across the country it rose by 10%. Analysts said such a gap had never been seen before. Fears of a housing bubble began to grow.<\/p>
Experts attributed the surge in market activity to record-low mortgage rates, credit availability, and a favorable economic outlook. The narrowing of the price gap began to appear toward the end of the year, when the bulk of demand moved outside London.<\/p>
This year, for the first time in six years, the rate of house price growth nationally will exceed that of the capital. This scenario is predicted by analysts at CEBR (The Centre for Economics and Business Research), whose data is cited by The Guardian. Experts expect UK prices to rise by 1.5% this year, while London prices will fall by 3.6%.<\/p>
Firstly, London's prime housing market is awaiting the parliamentary elections on May 7, as authorities closely monitor taxes and duties: the market is frozen in anticipation of further decisions. For example, in December, Chancellor George Osborne announced an increase in Stamp Duty paid when buying property: it rose to 12% for properties worth over £1.5 million, whereas previously it did not exceed 7%. Experts also note a decline in foreign interest in London property.<\/p>
"Outside London, our forecast for property prices has improved after the market calmed down a bit. The increase in Stamp Duty in December, as well as rising household incomes, have pushed up prices in many parts of the UK," the newspaper quotes CEBR economist and report author Nina Skero. In January, CEBR had forecast a 0.6% fall in UK prices, but after the Stamp Duty increase, the forecast was revised because the changes made it more advantageous to buy less expensive housing.<\/p>
Nevertheless, economic growth and limited supply will push London prices up, and by next year everything will return to normal, experts note. In 2016, balanced price growth is expected: 2.3% nationally and 2.7% in London itself.<\/p>
According to a report by the country's largest mortgage lender Nationwide, house price growth slowed in all regions except Northern England in the first quarter of 2015. The average UK house price now stands at £188,600, which is 5.9% higher than a year ago.<\/p>
In London, price growth slowed from 17.8% in the first three months of last year to 12.7% in the same period this year. The average house price in the capital now exceeds £408,000, which is 36% higher than during the 2007 peak. The most expensive borough in London is Westminster (£927,900), the cheapest is Barking and Dagenham, where prices rose most actively, by 22% over the year, to £261,000.<\/p>
Housing only became cheaper in Wales, by 0.5%, to £139,200. However, the cheapest housing can be bought in Northern Ireland, at an average of £121,000.<\/p>
"A decline or stabilization of prices in the London market will lead to a decrease in speculative purchases, that is, purchases by people who invest and will now invest elsewhere," says Anna Levitova, managing partner of W1 Evans. According to her words, cited by Gazeta.ru, changes in immigration laws – a sharp increase in the cost of the investor visa and complications with other types of visas – could affect the number of Russians in London. "Right now, for example, the entrepreneur visa or intra-company transfer are becoming more popular. But Russians have little influence on the market; prices are determined by investors from other countries, primarily China, Middle Eastern oil states, and the European Union. There is constant demand for London," the expert says.<\/p>