Research from Hamptons International has forecasted that prices in Greater London will have risen by 15.5% by the end of the year but next year will only see values go up by 3%.
Its predictions for Central London and prime Central London follow a similar steep drop off in growth.
This year Hamptons has predicted an 18% rise in Central London property prices which falls back to 7% next year while prime Central London drops to a rate of 3% growth in house prices next in 2015 compared to 10% by the end of this year.
Fionnuala Earley, director of residential research at Hamptons International,
said: “The rate of house price growth so far in 2014 has been a little higher than expected. Prices have been driven largely by London and the South East but a change in sentiment over the rate of future price growth has affected the whole of the country and we expect that to result in a moderation in house price growth next year.”
Earley said the change in sentiment has been brought about by increasingly strong messages from the Bank of England culminating in the
implementation of more stringent affordability regulations, including the introduction of the Mortgage Market Review.
She added: “… a recognition that interest rates will begin to rise before too long has led both buyers and sellers to moderate their expectations of future price growth. This is at a time when the financial position of many households is still stretched as real wages have been falling for five years.”
