House prices will fall over next five years, says Niesr

twadge_face

Rinoa wrote: »

So, after 10 years of the biggest free money give away in the world ever, average house prices will increase another £19k by 2015.

Tut tut tut. No such thing as free money.

Robbin' the hitherto propertyless FTBs innit.

Thought you were smarter than that.

Sounds good to me. :j

Enjoy your "free money" but remember you're eating our young. Hope they taste yummy. Hope they're worth it.

Perhaps they are like deep-fried, battered foetuses with a sweet chilli dip?

Enjoy your immortality.

new_home_owner_3

brit1234 wrote: »

House prices will fall over next five years, says Niesr

House prices will fall in real terms over the next five years as inflation outstrips meagre rises in property values, one of the country’s most respected forecasting bodies has warned.

By Philip Aldrick and Angela Monaghan
Published: 6:41AM BST 28 Jul 2010

The National Institute of Economic and Social Research (NIESR) claims that prices will fall, in real terms, by about eight per cent.

It means that after accounting for inflation, “real” house prices will have collapsed to 2003 levels by 2015

The forecast will add to families’ woes as they face higher taxes and lower wages that even the Treasury predicts will grow more slowly than inflation for the next three years. Capital Economics has estimated that the average household will be £3,000 a year poorer under the measures introduced in last month’s Budget.

NIESR’s figures show that although average house prices are expected to rise from £194,235 last year to £213,091 in 2015, they would need reach £231,000 to keep pace with inflation. As a result, average households will be £28,000 out of pocket.
Simon Kirby, a NIESR research fellow, said: “While we have assumed the housing market remains stable, house prices could decline at a more rapid pace.”

Families have already been hit by falling house prices. They crashed 19.3 per cent during the recession, according to Nationwide and have yet to recover to pre-crisis levels despite a 10 per cent bounce. Mr Kirby said that weak bank lending would restrain house price growth.

NIESR’s housing outlook came as it warned that a double-dip recession is more likely following the coalition’s emergency Budget. The probability of a full year of negative economic growth has risen from 14 per cent to 19 per cent as a result of the extra £40bn of spending cuts and tax rises unveiled by the Chancellor last month, it said.

“The Budget will inevitably reduce growth,” Mr Kirby said. “The major impact will be in 2011, when we believe it will shave off 0.4 percentage points of GDP [roughly £7.5bn].” It is forecasting slightly slower growth than the Treasury’s independent forecaster, the Office for Budget Responsibility, of 1.3pc growth this year, 1.7pc in 2012 and 2.2pc in 2013.

However, Ray Barrell, senior research fellow, said the Chancellor’s plans were “necessary” to get a grip on the country’s £927bn of public debt: “I don’t think we could have grown our way out of this.”

Although the economy is recovering, NIESR does not believe it will get back to pre-recession levels until 2012 – a period of decline matched only by the Great Depression of the 1930s and the recession of 1979-1983.

http://www.telegraph.co.uk/finance/economics/houseprices/7913776/House-prices-will-fall-over-next-five-years-says-Niesr.html

you better change your signature to 2015 then brit;):D