The New Year means a new start for some people. You might think about looking for a new job, taking up an interesting hobby, or maybe buying a new house.
If you’re considering getting a new home next year, here’s what property companies are expecting for the housing market in 2015.
According to a new report this week, London house prices are set to slow down in the New Year and they could even start to fall. This is mainly due to how much house prices in the capital have risen over the last year, making it difficult for further growth. The proposed ‘mansion tax’, a tax on high value properties, could also affect London house prices if it’s brought in. And the lending restrictions introduced by the Mortgage Market Review are expected to contribute to a decline in the rise of property prices.
However, any falls in prices are expected to be minimal, so this shouldn’t be seen as the house price bubble bursting. The report, by property firm Savills, also goes on to say that the trend isn’t expected to last, and property prices in London are likely to rise again from 2016. By 2019, it’s reported that London house prices could have risen by around 10.4 per cent – so savvy buyers may want to act during next year’s predicted lull.
Meanwhile, a report by the Centre for Economics and Business Research from earlier this month predicted that house prices across the UK could fall by around 0.8 per cent in 2015. Experts were quick to confirm that the fall in prices wouldn’t be a housing crash, and was instead the market ‘adjusting itself’ after several property price increases in 2014.
News that property prices could be set to fall is never good to hear if you’re hoping your house has increased in value to fund a move. Along with the tougher rules around mortgage lending, this could mean that people may be less likely to move house if prices fall.
However, a slowdown in price rises could help to make property more affordable - particularly for those looking to get on to the housing ladder for the first time. If, as both reports predict, London house prices fall faster than elsewhere in the UK – or UK property prices rise faster than in London – it could mean that Britain’s property market will start to even out. London’s house prices have long been substantially higher than the rest of the country, so a change in fortunes could make some of the UK’s other large cities more desirable to move to. However, if house prices in the capital start to slow up, it could also encourage people to snap up a bargain and move there while they can afford it.
If you’re looking to move in the New Year, you might want to start thinking about how your credit score will look to potential lenders. Try not to take on any extra credit during the three months or so before you apply for a mortgage, as lenders may be concerned you have taken on too much borrowing.
And if you get rejected from one mortgage lender, don’t be disheartened. Lenders have different criteria for deciding who to lend to, so you may be able to find another who’s happy to take you on.
Ocean could help you to find a mortgage deal suited to your needs. We offer advice and browse deals from a panel of lenders to find the one that’s right for you.
Disclaimer: All information and links are correct at the time of publishing.