UK house prices expected to jump 7% in 2014
House prices in the UK are expected to rise over the coming year, driven by ongoing growth in the London property market. According to a poll of 27 industry analysts and economists by news agency Reuters, prices will increase by around seven per cent in 2014. It will be the nation's capital that will lead this growth, the experts believe, since supply in the city remains low and interest from investors is increasing. In London, prices are forecast to jump by 9.2 per cent this year, followed by seven per cent in 2015 and five per cent the year after. "London house price growth is completely out of step with the rest of Britain," Gary Styles from GPS Economics told Reuters. "This dichotomy is likely to continue for the next year or so before expectations return to more sustainable levels." Philip Shaw, chief economist at Investec, added that the capital's residential property market is "without doubt over-cooked" thanks to a lack of supply. The results of the poll come after Mark Carney, governor of the Bank of England, admitted there is little that can be done to prevent house prices in London from soaring. Speaking on the BBC's Andrew Marr Show, he said the central bank is unable to influence a market that is so driven by cash buyers who do not take out mortgages. The latest figures from the Office for National Statistics suggest that growth in London was largely responsible for a 5.5 per cent increase in UK house prices in December 2013. Compared to the same month a year earlier, prices in the capital were 12.3 per cent higher. Excluding London, average values increased by just 3.1 per cent. Rightmove data also paints a similar picture, with asking prices for property in London up 5.2 per cent this month compared to January, influencing a 3.3 per cent increase across the UK as a whole. The company pointed out that demand for property is greatest in the south of the country, while supply is also scarcest, and that this is driving up prices.
--- Ends ---