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Just as most commentators are warning of a possible slowdown in house price growth, so respected consultancy CBRE says it is revising its 2014 forecast upwards.

It says by the end of the year average prices across the UK will be 12 per cent higher than in the new year, although it too believes the rate of growth will slow towards Christmas.

More positively, it says the market will remain strong over the next five years, underpinned by an improving economy and an underlying lack of supply. It predicts that house price growth will continue across the UK from 2015 to 2019, rising 30 per cent on average, with London and southern England seeing the largest increases.

The sharp house price growth over the last year is typical at the start of a recovery, due to the release of pent-up demand. This rapid rate tends to subside as recovery becomes established says Jennet Siebrits, CBRE's head of residential research.

Affordability is the key going forward and mortgage payments as a share of take home pay currently remain relatively favourable when compared with long-term trends. When interest rates start to rise, we expect it to be at slow and considered increments so the impact on mortgage affordability may be quite minor and contained she says, striking a more optimistic note than many other analysts when it comes to base rate rises.

Comments

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    Agreed. Headline grabbing at its worst. 30% rise outside London and the South East inside 3 and a bit years Yeah right. Not going to happen. Once again, different predictions coming from different areas - who do we trust It's the lies, damned lies and statistics argument again. I don't know who to believe, so I'll watch and wait instead.

    • 01 August 2014 15:33 PM
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    Sounds a little convoluted to me. First Savills says that London prices are slowing down, but now CBRE says they are set to skyrocket I don't understand how they can think that house prices can rise by that much and there will still be a demand for buying. Makes me glad to be a landlord because if housing prices grow by this much, I have no doubts the amount of renters will rise!

    • 01 August 2014 11:44 AM
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    Obviously "respected consultancy" CBRE is trying to grab the headlines. Anyone who thinks house prices are going to go up by 30% in 3 and a half years outside the capital must be using a crystal ball which is somewhat cloudy.

    • 01 August 2014 11:12 AM
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