Following the gloomy post I made on 31st Aug “UK Home Ownership Set For Decline”
There is a sort of upbeat flip side to the same story as reported in the national media
Property prices are set to soar by 21.3% by 2016, according to economists.
In what is hailed as “fantastic” news for the property market, the average value of a home in England is expected to rise from the current £214,647 to £260,304 within the next 5 years.
This news comes after property asking prices rose by 1.3% in July, the biggest monthly jump since January 2010.
According to research by Oxford Economics for the National Housing Federation, the shortage of housing, combined with rising rental demand will drive the next property boom, with house prices rocketing by more than a fifth in just under five years.
The new report stated that over the past year, only 105,000 new properties have been built across the UK – the lowest level since the 1920s.
This is less than half the number needed to meet the current demand.
The predicted boom in property values will come as welcome relief to homeowners, many of whom have battled with negative equity since the start of the recession.
If the findings of the report are to be believed then all regions of the country should see an increase in property prices.
7% of home owners currently owe more than their property is worth, according to the Council of Mortgage Lenders, (CML).
In some parts of the country this figure is actually as high as 16%.
Stephen Dyer, managing director of Ideal Property, said the forecast was “fantastic news for homeowners. These projected figures are massively positive and they are from a credible source so it’s great news that they think house prices will rise by so much. It is an absolutely fantastic forecast. Some people will find these predictions very hard to believe given the current economic situation and the fact that the housing market is still struggling, but this report is looking at more than just this year. There are not currently a lot of new houses being built so there’s competition for the properties that are on the market already. That means house prices will rise. It is just a matter of time. Lending will also free up at some point. When that happens, which it will, and when more people start becoming more confident about the market, which they will, there will be a significant improvement. Many people have seen huge sums wiped off their pensions because of the stock market crash, so this will be very welcome news.”
Housing Minister Grant Shapps said: “The trebling of house prices in the 10 years from 1997 has locked too many out of owning their own home. We need to get Britain building again. That’s why I’ve announced plans to release thousands of acres of public land. Despite the need to tackle the deficit we inherited, this government is putting £4.5billion towards an affordable homes programme, set to exceed our original expectations and deliver up to 170,000 new homes over the next four years.”
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