According to analysis at the Center for Economics and Business Research (CEBR), the price of an average house in the UK will rise 14% over the next four years, reaching the highest ever recorded housing prices by 2015.
The reports also indicates that the average home will be worth more than £200,000 by 2015, up for its current £176,000. Despite the fact that this anticipated rise is likely to be below inflation, the report is good news for homeowners, many whom have been left in negative equity as a consequence of the recession.
In 1997, UK housing prices peaked at £191,200.
Chief Executive of CEBR Douglas McWilliams said that the substantial lack of homes for sale one of the major reasons why prices will begin to rise again. “We do not expect a house price boom, but the housing shortage is likely to push prices gently upwards.”
CEBR believes that the Bank of England will maintain the base rate low for several more years after being cut to 0.5% in March 2009, cutting the cost of mortgages for millions of homeowners. McWilliams doesn’t think the base rate will go above 2% before 2015.
This seemingly good news for homeowners comes as the Council of Mortgages Lenders announces that gross lending last month was just £12.6 billion, the lowest monthly total the country has seen in July since 2000 and some are noting that lending remains a world away from the level the UK needs it to be for the national housing market to pick up again.
On the rental front, a report from LSL Property Services said that rent prices have reached an all-time high, with an average tenant paying £705 per month. In London, however, the rent prices are significantly higher, with the average rent reaching more than £1,000 and rents are rising much faster than salaries.
Source and Photos: The Daily Mail