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House prices forecast to grow 1.5%

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House prices in the UK are expected to rise by 1.5% during 2015, the Centre for Economics and Business Research has predicted.

The 1.5% growth forecast represents an upward revision by the firm, which said in January it expected prices to drop 0.6% across the year.

In London, it still predicted the average property would fall by 3.6% after huge growth in the last 12 months.

Across the rest of the country, buyers are more confident about the outlook for the market. Changes to stamp duty in December have also allowed more people to purchase a house sooner than expected.

However, in London the strength of the pound against the euro and fears of a mansion tax have deterred demand from overseas buyers.

This means growth will be stronger outside of the capital for the first time since 2009.

Nina Skero, Cebr Economist and author of the report, said: “Outside of London, the outlook for house prices this year has improved after a few months when the market appeared to be coming off the boil. December’s stamp duty changes, as well as rising household incomes, are lifting prices in many parts of the UK.”

“In London, however, we expect prices to decline by 3.6%, driven by a significant weakening at the prime end of the market. A potential mansion tax, reduced overseas interest and hefty new stamp duty rates have hit demand for high value property.”

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