Just a month ago the Centre for Economics and Business Research (CEBR) predicted that 2010 would see house prices rise an average of 2-4%. Ot has now revised that figure upwards to 6%. They also predict that house prices will be 20% higher at the end of 2013 than they are today.They say that house prices have already risen by 10% since the bottom of the slump and that a number of factors will ensure prices continue to rise.

Their premise is that there are few properties available, more buyers and mortgages are now more freely available than previously forecast.

The CEBR was one of a very few of the analysts that foresaw a 2009 house price recovery.

There are however still very few property transactions and compared to just a few years ago the buyer has to have a relatively significant deposit or equity in the home they already have. This means their mortgage requirements are much lower than the previous average buyer. There is also the matter of tightened lending criteria with regard to affordability, earnings and proof thereof.

This coupled with the low numbers of sales will distort the whole picture.

Looking at it from another perspective, if the country had to get the property market moving at 2005-2007 levels again without government getting involved, property prices would have to plummet. There is no other way.


How do young people now save up for that huge deposit for their first house? For the next few years they will be taxed to pay for the last boom and have poorer wage expectations too. Also, many thousands who hoped for that university education fast track to a well paid future will be disappointed this autumn as the £1 billion education cuts bite into university funding.

If house prices do go up this year it will be based on an unrepresentative sample and will just leave prices further to fall.



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