UK Housing Market in Slight Pause Mode until General Election
The hot start to the UK housing market early last year saw many economic highlights happening all at once. Inflation was falling closer to the Bank of England goal of 2%, while incomes were growing and unemployment was falling. Houses were selling at a blistering rate, and remortgage activity was flying high. Many economists were predicting a probable base rate increase by the end of the year; so many movers were moving out and moving in.
By the end of summer, changes in activity started to creep in based on new estimates of when the base would indeed make its move. At that point, many economists were reconsidering their earlier estimates and updating the move to occur sometime the following year. That year is now upon us and once again several issues dominate the headlines within the housing market.
One of the most significant moments coming this year which will reverberate through the UK and cause shifts in decision making is the general election. Although stamp duty reforms took place in autumn, uncertainty remains about other changes which could affect the housing market. Due to this uncertainty, many of those on the cusp of making housing decisions are pausing before moving forward.
Growth in house prices of between 3% and 5% is expected in the year 2015, and the latest estimate of a base rate increase is early 2016. Until then, the UK housing market is expected to continue moving ahead at a subdued rate until the general election to see what is in store next.