Uncertainty due to next year’s General Election, interest rates, and the global economy will all be key factors in the property market over the next six to eight months.
Carol Peett, Managing Director of West Wales Property Finders, says: “Looking ahead to 2015, the General Election is likely to cause uncertainty in the market which will be reflected by a drop in market activity next Spring. This, combined with the threat of a Mansion Tax, has the potential to devastate the higher end of the market, particularly in London. Conversely, should this be introduced, it would boost the market in the more rural locations such as West Wales where large country houses can be purchased for well under the £2 million tax band. We are already seeing the effect that the threat of this brings, with people swapping one large property in London or the South East for a smaller property there and a large country house or coastal property here in West Wales. An increase in interest rates would also have the effect of dampening the market”.
However, if economic recovery continues in the UK, bringing with it the likelihood of real wage growth occurring over the next few years, then I can see the market rising steadily but more slowly for the next 5 years. Prices will creep up by 3-5% over the next twelve months in Wales. It will still be trailing London & the South East, but as that market cools, we will see investors casting their eyes westwards for opportunities to get ‘more bang for their buck’. The excellent summer of 2014 and a boom in bookings for holiday cottages have made second home ownership an attractive proposition.
“In November 2014, I predicted that the UK market would see a growth of between 6-8% overall, with London prices seeing growth well into double figures. Wales, on the other hand, I suggested would rise by just 4-5% due to it always lagging some way behind the market in the rest of the UK”, said Carol Peett, who co-founded West Wales Property Finders in the Autumn of 2014 having previously run the West Wales office of County Homesearch.
“According to the Land Registry, prices to September in England and Wales had risen 7.2%; in Wales they had risen by 4.3% and in London by 18.4%, making my predictions pretty accurate”, she said.