'House prices could rise 16% by 2014'

IveSeenTheLight

from http://www.moneysavingexpert.com/news/mortgages/2010/11/house-prices-could-rise-16-by-2014?utm_source=forum&utm_medium=sidebar&utm_campaign=box

House prices will edge ahead by 2% next year but property values will be 16% higher by the end of 2014, an economics consultancy predicted today.
The Centre for Economics and Business Research (CEBR) expects house prices to rise by only 2.2% in 2011 as unemployment increases on the back of public sector cuts and household incomes remain under pressure (see the Free House Price Valuation guide).
But it expects low interest rates, further quantitative easing (printing money) from the Bank of England and the ongoing housing shortage in the UK to offer some support to the market.
As a result, it predicts values to be 16% above their current level by the end of 2014.
The forecast contrasts significantly with those from many other economists.
Howard Archer, of IHS Global Insight, expects house prices to fall by 10% during the coming year, while Capital Economics still expects a 20% slide in values between now and the end of 2012.
'Rise significantly'
Douglas McWilliams, chief executive of the CEBR, says: "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 expects house prices to end this year just under 7% higher than they started it, at an average of £179,411.
Sluggish growth in 2011 will be followed by stronger increases of 4% in 2012, 5.4% in 2013 and 4% in 2014, to leave the average property costing £208,816, it adds.
The CEBR says a decision by the Bank of England to embark on a fresh round of quantitative easing would reduce long-term interest rates and help to boost mortgage lending.
As a result, it expects the number of mortgages advanced each month to rise from its current level of just 47,000 to around 77,000 by 2014, although this figure is still below the peak of 119,000 in 2006.

Graham_Devon

They could do.

But it's highly unlikely they will IMO (and the opinion of many economists, and those involved in housing, such as RICS).

They could rise if we get major QE though, I will agree. Depends how much, when, what its targetted at etc. But I think at that point, we'd have other issues to contend with. Such as pretty high inflation, and even 16% rises over 4 years would probably real term falls if we have further QE, on the top of already high inflation and low interest rates.

IveSeenTheLight

I'm not sure why MSE have their official thread in the mortgages and endowments forum
https://forums.moneysavingexpert.com/discussion/comment/38329684#Comment_38329684

Is it so the discussion can be held outwith this naughty playground were in

Sibley

It wouldn't surprise me if this turned out to be spot on.

Of course home owners would love it. I'm just looking forward to the time when the bears admit defeat. There sure as hell ain't gonna be a house price crash.

Eric1

I don't mind if they do if I get an interest-free mortgage

vaporate

Forget about selling your overriced crap hole then lol

Only somone born into money with no brains would buy.

IveSeenTheLight

vaporate wrote: »

Forget about selling your overriced crap hole then lol

Only somone born into money with no brains would buy.

Hmmmmm,
Are you insinuating that people borne without money but plenty of brains will never be able to buy?
what about those with no money and no brains?

I guess those with money and brains may consider investing in property to cater for the growing rental market that will prevail.

vaporate

IveSeenTheLight wrote: »

Hmmmmm,
Are you insinuating that people borne without money but plenty of brains will never be able to buy?
what about those with no money and no brains?

I guess those with money and brains may consider investing in property to cater for the growing rental market that will prevail.

With prices in the hundreds of thousands for a terraced property or flat?

lol

I personally would rather just save and leave my money to the next generation of family relatives within my family when it will be more doable. That would be the most noble, realistic thing to do.

AKA I will be the lost generation.

Aberdeenangarse

vaporate wrote: »

AKA I will be the lost generation.

:coffee::coffee::coffee::coffee::coffee:

IveSeenTheLight

vaporate wrote: »

I personally would rather just save and leave my money to the next generation of family relatives within my family when it will be more doable. That would be the most noble, realistic thing to do.

AKA I will be the lost generation.

Noble?, questionable.
Currently with interest rates and inflation, your savings will not be worth the same worth as you saved it.

lemonjelly

IveSeenTheLight wrote: »

I'm not sure why MSE have their official thread in the mortgages and endowments forum
https://forums.moneysavingexpert.com/discussion/comment/38329684#Comment_38329684

Is it so the discussion can be held outwith this naughty playground were in

Must admit, I wondered the same myself...:think: