The Centre for Economics and Business Research (Cebr) has just published a forecast showing that a typical UK house is expected to cost £227,000 in 2014. If so this will be the first time that prices reach this level since the 2007 pre-crisis.
By 2018 the Cebr forecast that the average house price will reach £267,000. However, they are cautious about the short term, citing lacklustre wage growth, domestic banks’ ongoing recapitalisation efforts and Eurozone financial unrest as factors they expect to subdue house price growth in 2013 and 2014.
Many commentators expect the Government’s help to Buy scheme to stimulate the market. It aims to assist both first time buyers as well as those seeking to move up the ladder. Many of our landlord insurance clients will be very pleased to read anything that suggests that the value of their investment will go up.
Daniel Solomon, Cebr Economist and main author of the report 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”.
It is very difficult for those people wondering whether or not to enter the buy to let business for the first time. There are so many variables to consider: what is likely to happen to rental yields; capital values, tenant demand and so on. The most successful professional landlords spend a lot of time doing their research before committing to a particular location and type of property. At the other end of the scale, many people have bought properties thinking they will generate a nice steady income only to find themselves overwhelmed with unexpected bills for repairs.
Cebr supplies independent economic forecasts and analysis to private firms and public organisations. This research was published on 1st April 2013. For more information visit www.cebr.com/reports
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