House prices are set to increase by 15% by the end of 2015, as part of a four-year recovery that will start late this year, predicts one economics group.
The value of properties will fall for much of 2011, ending the year 1.4% lower than at the start of the year according to the Centre for Economics and Business Research (CEBR).
But with the number of new homes built last year only half the amount of new households, prices should increase by 16% between 2011 and 2015, a gain of around 4% a year.
And as the banks’ balance sheets start to look more healthy they should start to relax their lending criteria.
CEBR chief executive Douglas McWilliams said: ‘We still believe house prices will fall this year, although there are signs that prices will stabilise over the second half of the year. We think the market is currently close to the bottom for the UK as a whole.
‘The main factor driving house prices up is the shortage of available housing which has already pushed up rents. Housing completions fell to only 130,000 in 2010, well below the level required to keep pace with demographic change.’