Market cools down sharply in November

The property market has seen a sharp slow down in November helped by the introduction of stricter mortgage rules. Buyers are also taking stock and holding back because house prices have risen so sharply over the last 12 months.

There is also the prospect that interest rates will increase in 2015 which will mean that mortgage payments will go up. That being said the spring market is the busiest period of the year for the housing market so it will be interesting to see how things pan out.

The government will surely do everything it possibly can to keep interest rates on hold until after the general election so that they can boost there chances of getting reelected. Building societies have reported a sharp slowdown in mortgage approvals which is dampening demand but this is exactly what the Bank of England want in order to avoid a crash in property prices further down the line.

There is some good news for homeowners as the Halifax predicts house prices could increase by up to 5% in 2015 despite the uncertainties. It must be said that borrowing money is as cheap as it has ever been with the Bank of England base rate still at 0.5%. There will be calls for the restriction of mortgage lending to be eased as the property market could come to a grinding halt again.

Banks and building societies are turning away perfectly good borrowers because of the new mortgage rules that have been put in place and this is not helping first time buyers get onto the property ladder. There have also been calls on the easing of of rules that are inhibiting borrowers aged over 40 as this is also taking many potential buyers out of the market and placing further pressure on the rentals market.

The upper end of the property market has also been affected due to the rapid rise in prices and the uncertainty over the mansion tax that could be introduced if the Conservatives don't get back into power. Because of the current climate this is seen as a popular policy particularly amongst Labour supporters who still want to bash bankers who they see as the root cause for our woes of the last 5 years.

Buyers are sitting on their hands as a mansion tax would surely affect prices of houses over £2m. When all is said and done the Halifax has said that prices have risen by 8% this year which was right at the top of it's forecast.