House Prices To Rise 20%
The headline yesterday on the front of the Daily Express was exactly that, "House Prices to rise by 20%".
It sounds dramatic and optimistic, but reading on they explain this is expected over the next 4 years ie approximately 5% growth per annum.
The article continues,
"House prices are set to soar by almost 20 per cent in the next four years, according to experts.
This will lift thousands of households out of negative equity, with the average family home gaining more than £30,000 in value.
The forecast defies doom-mongers who predicted Britain would face a double-dip housing recession.
Martin Gahbauer, chief economist at the Nationwide building society, said: “It’s not a double dip and it’s not a massive boom, which would not be good for the market.
“People can be cautiously optimistic. If it turns out that way, it would probably lift quite a few people out of negative equity within two to three years.”
And Emma Partridge of Halifax, Britain’s biggest mortgage lender, said there was further good news for home owners.
She said: “Because this is happening at the same time as low interest rates, it’s providing people with the opportunity to pay more to improve their equity. And if there aren’t going to be any further drops in house prices then that enables people to bolster their equity as well.”
Last year, after house prices tumbled, almost a million households were left in negative equity, with their property’s value less than the amount they owed on their mortgage. According to the respected Centre for Economics and Business Research, a “fundamental shortage of housing supply” will steadily drive up prices this year and next, with a further five per cent increase expected in 2012.
The growth is due to continue with a 5.4 per cent increase in 2013 followed by a 3.9 per cent rise in 2014.
Based on the latest estimates, the average price of a home in Britain would rise from £179,000 at the end of 2010 to £212,000 by 2014.
The figures suggest the housing market will weather the storm of public spending cuts, which had raised concerns that the sector could face another downturn.
Peter Bolton King, chief executive of the National Association of Estate Agents, said: “This just shows there is confidence out there from people who should know what they’re talking about, that investing in property is good. It gives people that little bit of confidence in the UK economy.” But he warned Britain faced a shortage of homes on the market.
“Last year, fewer properties were built in this country than at any time since the Second World War,” he said. Population growth will continue but more importantly, household formations are going to continue to grow. We’re nowhere near catching up.”
The CEBR’s Consumer And Housing Prospects report, which also predicted the number of monthly mortgage approvals would jump from 51,000 this year to 80,000 in 2014, quelled concerns that the market was struggling to recover.
Overall this makes good reading for those investing in buy to let, who currently are finding conditions better than almost any time in the last 5 years, with higher yields and bigger discounts available than previously, giving investors more positive cashflow and more equity on day one!
We are currently busier than ever with property deals, with clients finding deals to suit whether they are looking for certain parts of the UK, or high positive cashflow or strong equity from day one, our sourcers are finding the deals!
Article Courtesy of Alan Forsyth @ Property Investment Deals
