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2014 home prices tipped to top 2007
By 2014, a typical house in the UK will cost 223,000 pounds, economists predict
UK house prices will surpass their pre-financial crisis peak for the first time next year, amid signs of improvements in the mortgage market, economists have predicted.
Average prices this year are expected to edge up to £219,000 this year, marking a 0.8% increase compared with 2012, the Centre for Economics and Business Research (CEBR) said.
By 2014, a typical house in the UK will cost £223,000, a figure which is 0.7% higher than the 2007 peak.
The slow recovery will be welcome news to homeowners who bought around the peak of the market and have found themselves stuck with little or no equity in their home.
The forecaster said that house price growth will accelerate in the coming years as the economy gradually picks up. CEBR predicts that in five years' time a typical home will cost £261,000, representing an increase of almost a fifth (19.1%) compared with this year.
Daniel Solomon, CEBR economist and main author of the research, said: "Next year, UK property prices will hit a significant milestone, passing their pre-crisis peak for the first time. This will be driven by fundamentals, such as a return to modest economic growth."
House prices have remained sluggish in recent years, although experts have been surprised at the resilience of much of the market, given the wider difficulties of the economy.
Surveyors and lenders have predicted that house sales will pick up this year amid improvements to the mortgage market which have come about as a result of a multi-billion pound Government scheme which was launched in August to boost lending.
Lenders have been slashing their mortgage rates and the number of deals on the market has also increased since the scheme started. The Council of Mortgage Lenders recently reported an uplift in loans being advanced to first-time buyers and mortgage approvals to home buyers generally have been increasing in recent months.
The Royal Institution of Chartered Surveyors also recently suggested that the housing market could be over the worst of its problems.
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John G is correct. Getting the First Time Buyers back in the market generates growth via purchasers from the bottom through to the rest of the economy.
What we don't need to see is incentives and deals to get them just to buy new builds. That may help the construction industry (and we all know who has their fingers in that particulat pie), but it does nothing to help the overall market, as nobody moves out of a newly built house.
If they are offering deals on new builds, they should offer them to first time buyers who are buying pre owned houses, as that will be far more benefit to the overall housing market, whisch generally fuels the economy.
Something simple like a method of funding 5% deposit and no stamp duty for a first time buyer would do it.
If they can find money for people who want to go into further education (even if its via grants) then they should find money to help those that don't, and choose to make their own way by getting jobs and investing in their own homes. These people tend to stay in the UK, not like so many of the Uni Grads, who bugger off abroad after using British taxpayers money to gain an education.
I know which one of tha above I think should be helped first, and which one does the most good for the British economy!
Happy New Year
Like it or not, as long as there is a population issue in the UK there will be a housing market. Buy-to-let, ordinary home buyers or anyone else will be keeping the market buoyant. The reason the retail industry is suffering is because they are locked into their property world with ludicrous rental agreements, scandalous business rates and other issues that the on-line retail industry doesn;t have. Plus the Charity shop competition. All great for the property market.
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