Millions of British homeowners were given a timely boost last night as it was forecast average house prices are set to rocket by £45,000 over the next five years, according to a report in Britain’s Daily Express newspaper.
The report says: As the UK economy stutters back into life the outlook looks bright for those owning or aspiring to own their own home with yearly increases of £9,000.
And in a double boost, mortgage rates have hit record lows as the high street feels the effects of action to breathe life into a previously stagnating housing market.
The positive picture comes in a top-level report by the respected Centre for Economics and Business Research. Experts said the average UK home would be worth £267,000 by 2018 – up from today’s £222,000.
“By 2018, we expect the typical UK home will cost £267,000 – over 20% more than this year.”
The boom equates to a £25-a-day – or £750-a-month – increase in value and proves action is working to drag the housing market out of the doldrums.
The news quickly follows Chancellor George Osborne’s budget “to get Britain moving again”, which contained a raft of measures to help people get a foot on the property ladder.
Last night economist and report author Daniel Solomon said: “By 2018, we expect the typical UK home will cost £267,000 – over 20% more than this year.
“Gradual wage and population increases will be the fundamental drivers of this medium-term trend. We expect the Chancellor’s new Help to Buy scheme will push up house prices before it raises housing supply.
“We predict the scheme’s effects will be quite modest, but it could support the construction of roughly 5,000 new homes in 2015. This supply boost could provide a welcome route on to the housing ladder for a small number of aspiring homeowners.”
News of a resurgence in Britain’s housing market comes after the Council of Mortgage Lenders reported home loans had got off to their best start since 2008, when the market was at its pre-crisis peak.
Buyers can now pick up some of the lowest rates in history, with one building society offering a two-year fixed rate at a staggering 1.74 per cent.
Lacklustre wage growth, recapitalisation by domestic banks and the deepening Eurozone crisis are expected to subdue house price growth this year.
But next year, the CEBR expects house prices to be 2.3 per cent higher than they were in 2007.
Experts said the predicted strengthening economy will lead to rising wages, while population growth is projected to outpace housing supply increases.
It is these two crucial factors that will lead to accelerating house price growth. By 2018, the CEBR forecasts a typical UK home will cost £267,000, as house prices rise by 4.6 per cent over that year.
Incredibly, in five year’s time UK house prices will be 20.4 per cent higher than they currently are.
Last night independent financial expert Stephen Bacic urged Britain’s army of first-time buyers to take the plunge and invest in bricks and mortar.
He said: “There is a lot of pent-up demand out there but credit is getting easier to obtain. I don’t believe there is ever a bad time to buy a house – people have absolutely nothing to gain by waiting to get on the property ladder. Now is as a good a time as ever.”Click here to read to full Daily Express report.