NHF warns of 40% house price increase
The National Housing Federation (NHF), which represents independent non-profit housing associations in the UK, has issued an alarming report in which it warns that house prices could rise by 40% over the next five years.
Such an increase would bring the average price of a home in Britain to over £300,000 and, according to the NHF report, Government plans to increase house building may not be sufficient to prevent such an increase.
Since 1997, UK house prices have risen ahead of wage inflation: house prices have risen by 156%, while incomes have risen 35%.
Oxford Economics, the independent analyst, has prepared the data for the federation’s report and it includes indicators that interest rate rises will cause a slowdown in the housing market in 2008 and 2009, but that a new boom will follow.
The NHF is urging the Government to give priority to its plans to build three million homes by 2020. The proposals include the building of over 70,000 affordable homes each year until 2010/11.
According to the NHF report, large numbers of first-time buyers who are priced out of the housing market turn to the social housing sector, although a growing number of parents are subsidising their sons’ and daughters’ mortgages.
Over the past five years, housing waiting lists have increased by 57%, leaving four million people in need of 1.6 million homes.