House prices tipped to rise 16% by end of 2014
By Landlord Expert
House prices will be 16% higher than they are today by the end of 2014, an economics consultancy has predicted.
The Centre for Economics and Business Research (cebr) has predicted a rise of just 2.2% for property prices in 2011, due to the expected unemployment increase following public sector cuts and continued pressure on household incomes.
But by 2014, the market will have received support from low interest rates, further quantitative easing from the Bank of England and the ongoing UK housing shortage, cebr said.
Its forecast is considerably more optimistic than those from many other economists.
Howard Archer of IHS Global Insight said he expected property values to fall by 10% over the next year, while Capital Economics predicts a 20% slide in prices between now and the end of 2012.
Douglas McWilliams, chief executive of cebr, said: "Quantitative easing is a very powerful medicine and is likely to have a strong impact on the housing market eventually.
"House prices may not move much during 2011 but they are likely to rise significantly in the following three years on the back of quantitative easing to offset the impact of the fiscal retrenchment."
The group said it expected house prices to end 2010 almost 7% higher than they started it, at an average of £179,411.
By Landlord Expert
