U.K. house prices increased by 12.1 percent in the year to September 2014 but property agents warn that political developments in the U.K. are denting growth at the higher end of the market.
According to the Office of National Statistics (ONS) house price index for September, U.K. house prices increased by 12.1 percent in the year to September 2014, up from 11.7 percent in the year to August 2014 and the highest annual increase since July 2007, when prices increased by 12.3 percent.
House prices continue to increase strongly across the U.K., with prices in London again showing the highest growth: an annual increase of 18.8 percent in September.
Despite the continuing increases in property prices, particularly in London, prominent real estate agents in the U.K. say that upcoming political events and proposals could dent the housing market's meteoric rise.
The forthcoming general election in May 2015 and the prospect of a controversial tax on homes worth more than £2 million ($3.2 million) – proposed by the opposition Labour party in the U.K. -- were having a "moderating" effect on the prime London residential housing market, U.K. estate agent Savills said on Tuesday.
In the agent's latest trading statement, Savills said the "general election and the potential implementation of a 'Mansion Tax' thereafter has had the expected subduing effect on buyers, albeit that we have seen registered buyers per listed property rise since the low point around the Scottish independence vote in the summer."