Forecast of the UK property market revised

British independent economic Agency, UK’s Office for Budget Responsibility (OBR), which represents the UK government economic forecasts for the budget, revised its forecast for house prices in the UK. According to the new forecast, the OBR expected growth of prices of real estate in the UK in the 2013/2014 year and 3.7% for 2014/2015 year – about 5.8 per cent in 2015/2016 – around 7% in 2016/2017 year – 4,2% , 2017/2018 and 3.7% in 2018/2019 and to 3.8%.

In addition, the OBR raised its forecast for the number of transactions in the residential real estate market. For example, in the 2014/2015 year is expected to now about 1280000 of transactions, 12% more than predicted in the initial forecast in March 2013.

Optimistic figures are based on the figures of 2013, when up to and including September, the value of the property increased on average by 3.8% and the number of transactions by 22%.

A significant correction of the forecast is also based on current prices in the UK and takes into account the good financial conditions that the UK banks now offer mortgages.

Published forecast is largely in line with the latest forecast from the world’s largest real estate Agency Knight Frank, which predicted the growth in property prices in the UK of 24% by the end of 2018. The impact of two factors – program Help to Buy and the economic recovery will have a positive impact on prices not only in London but also in other regions of the UK.

Overall the OBR forecast for the next 5 years – the growth in property prices by 27%, despite the fact that the forecast given in March 2013 , promised a 15% growth in prices.

The OBR also provided a forecast of collecting Stamp tax that, according to a published report, is expected to increase by almost half from £8.9 billion in the 2013/2014 reporting year, to £16.8 billion in 2018/2019 reporting year.

The increase in prices for elite real estate, which exceeds the threshold of £2 million pounds for which Stamp duty is payable at a rate of 7% , the budget will receive an additional £1.8 billion About £1 billion budget will receive from the increase in the number of transactions in the market.

Good income for the budget will come from tax on capital gains.

® Alice Morgan 07.12.2013 g.

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