Housing market boost
Britain’s battered housing market received a boost yesterday after an influential report predicted that house prices would rise 25 per cent by 2013.
The data, published yesterday by the National Housing Federation, said that the average price of a home in Britain would increase by a quarter over the next five years to £274,700, with values recovering in 2010 and growing more rapidly in 2011.
The forecast that house prices will grow in the next few years comes amid the sharpest downturn in the property market since the crash in the early 1990s.
Prices will fall by 2.1 per cent next year, the report said, but will rise by 1.3 per cent in 2010 and 5.2 per cent and 9.2 per cent in 2011 and 2012.
With the government on course not to meet its target of 240,000 new homes a year by 2016 – last year 175,000 were built – and with demand growing, the paper argues that Britain’s undersupply of property will prop up prices in the long term. Federation chief executive David Orr said: “Demand for housing is going up, while the supply of new homes is going down. This means that as soon as the economic outlook improves house prices will resume their previous upward trajectory.
“One in 13 households is registered as being in housing need, with 4m people now living in cramped or difficult conditions.”
The report also expects the number of houses built in the country to fall to 120,000 this year. It also found that one in four local areas has seen its housing waiting list double in the last five years.