HOUSE prices in London could rise by 4.5 per cent in 2014 according to Strutt & Parker and its economic advisors Volterra.
Stephanie McMahon, head of research at Strutt & Parker, said: “The Prime Central London market is particularly difficult to forecast because it is made up of a wide range of locations and price ranges. For example, transaction levels in the £2 million to £5 million price bracket have remained high in Q2 2014, although there is some evidence that volumes have dropped in the £10 million+ category.
“The economic foundations would certainly suggest that prices may continue to rise at the same rates over the next few years, but the biggest perceived uncertainty surrounding the PCL market over 2014/2015 will continue to be the looming election and the possibility of a mansion tax.
“We therefore expect that price growth during the remainder of 2014, and even more so in 2015, will be sensitive to prevailing political press and expectations.”
Andrew Scott, of London Residential, concluded: “The effects of the election are clearly being felt across the market, as usual everyone is wondering if this is the start of some big slide that will see billions wiped off values overnight.