Mortgage News
House prices to rise by 15% in four years – CEBR
House prices will increase by 15% over the next four years due to a shortage of properties in the face of rising demand, according to economists.
The Centre For Economic And Business Research (CEBR) forecast that the average price of a three-bedroom home will rise by more than £25,000 by 2016, the Daily Mail reports.
This would take the average price of a typical family home from £176,184 to £202,068 in four years.
The CEBR said that, despite the economic downturn, a persistent shortage of housing will trigger an upswing in house prices.
House prices will rise gradually, by 1.6% next year, before reaching an annual increase of 4.3% in 2016, it predicted.
However, the CEBR noted that a rise of 15% over the next four years would mean that property values rose at an average of 2.8% annually – a far slower rate than the 1980s to 2000s period.
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In addition, if inflation remains at its current level – 5% on the CPI – house prices will fall in real terms.