Cebr predicts 2010 house price rise of up to 4%
The Centre for Economics and Business Research (Cebr) has reported that while UK house price growth will moderate in 2010, a rise of between 2% and 4% can be expected.
Some commentators on the market are expecting significant house prices falls in the months ahead, but Cebr argues that this is unlikely for a number of reasons.
According to the think tank: “Mortgage lending will continue to improve slowly but steadily as banks continue to rebuild their balance sheets”.
In addition, the price of mortgages will remain relatively low if, as expected, the Bank of England keeps the base rate on hold at 0.5%.
Finally, Cebr argues that the house building sector has been the UK’s “biggest victim of the credit crunch” with housing completions falling by 18% in 2008, and likely to fall a further 19% in 2009, to just 115,000.
As a result, “the supply side imbalance will continue to act as a driving force for house price growth”, feeding through into prices over the next five years.
Looking further ahead Cebr analysts expect UK house prices to be around 15% higher at the end of 2012 than they are today.