House Price Recovery?
We reported yesterday about how the average price of a house in the UK has dropped consistently now for ten months in a row, making many people reluctant to apply for any type of loan or mortgage to buy a new house, due to the probability that they will be able to purchase the same property in a few months time for less money, which has the effect of driving prices down yet further.
But a recent report from the National Housing Federation (NHF) has managed to provide a slight glimmer of light at the end of the tunnel for the housing market with the first optimistic view for some considerable time with regard to the future.
Although the report, which has been researched by a group of independent economists, predicts that property prices are likely to continue to fall throughout the rest of this year and also through 2009, the market will probably start to recover in 2010 and then be followed by rapid growth from 2011 onwards.
The report suggests that the average price of a house in the UK is likely to increase by up to twenty five per cent over the next five years, with continued growth following. A spokesman for the NHF said that despite the recent reductions in prices, property still remained unaffordable for many individuals, making it very difficult for someone to be accepted for a loan or mortgage on a property unless they have a significant deposit.
He said “It is clear that even with house prices falling, affordability has not improved one iota. Ministers need to support housing associations in developing mortgage rescue schemes that prevent households from losing their homes. They should also support housing associations in buying up unsaleable private developer homes of a sufficient standard.”
