Rising wages and stamp duty cuts responsible for UK house prices falling 0.3%
After a 1.9 per cent rise in January 2015, the housing market prices swung dramatically to a 0.3 per cent fall this February according to statistics released by Halifax.
The fall is the first since October 2014. However, prices in the three months to February were up 2.6% compared with the previous quarter. This now means that the average house price in England and Wales is now £192,372. A rise of £12,000 on the average house over the past year.
According to Howard Archer / chief economist at HIS Global Insight – increases in 2015 are likely to be far more modest. Adding that they expect the market to rise around 5% in 2015.
Rising wages, increased spending power and stamp duty tax cuts are likely to be underpinning the market according to Martin Ellis, the Halifax’s housing economist.
Mr. Ellis went on to say that the demand for properties remained higher than the number coming on the market. This is good news for property owners looking into selling in the near future. “The supply of both new and second hand homes available remains low; another factor which is likely to be supporting house prices.”
However, first-time buyers are still finding it difficult to get onto the property ladder. According to the housing charity Shelter, 15 years ago the average house prices were five times the average income of first-time buyers. Whereas now property is almost 10 times their average wage.
Could the stamp duty cuts make it easier now? Managing director of buying agency Prime Purchase Charlie Wells said the housing market was being boosted by stamp duty changes, which means around 90% of the market benefit from a reduction in the levy. He added: “With interest rates unlikely to rise this year, those reliant on a mortgage will find it is a good time to buy. This will particularly benefit first-time buyers and stretched young families trying to move up the housing ladder.”
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Written by: The Team | On: March 9, 2015