HOUSE prices are set to dip across the UK next year as the market pauses for breath following the sharp growth in values seen in 2014, according to new predictions by analysts.
The Centre for Economics and Business Research (Cebr) said the UK property market has reached a turning point after its strong recent recovery.
This will be compounded by some prospective buyers being “startled” by the rise in interest rates which is widely expected by forecasters in 2015 as the Bank of England base rate moves off its historic 0.5 per cent low, it predicts.
Cebr forecasts that prices will grow by around 7.8 per cent across the whole of 2014, which is just over double the rate of the 3.5 per cent increase seen across 2013 and would be the strongest annual growth seen since 2007. But next year, prices are likely to see a 0.8 per cent year-on-year fall as the market adjusts itself, it predicts.
Growth is likely to pick up once more in 2016, with prices increasing by around 2.6 per cent year-on-year, according to Cebr’s forecasts. Values are then predicted to take upward steps of around 3 per cent each year, with a 3.4 per cent annual increase forecast for 2020.
Several housing market reports in recent weeks have pointed to the pace of house price growth slowing down, with some homes taking longer to sell.
The London market, the driver of house price growth, is now seeing a rapid cool-down.