Statistics collated by the government show that independent international economists predict stronger-than-expected UK house price rises over the next five years.
Each month the Treasury pulls together what it calls City and Non-City forecasts across a range of economic indicators. This month it has looked at forecasts for house price rises between now and the end of 2018.
While short-term analysts suggest a recent slowdown in price growth - and in some cases outright price falls - may herald a slump, economists appear far more optimistic.
The City commentators are Barclays Capital, Capital Economics, Citigroup, Commerzbank, Goldman Sachs, ING, Nomura and RBS Global.
They forecast rises in 2014 of between 5.8 per cent and 12 per cent. In 2015 the predicted increase will be 6.0 to 16.5 per cent. In 2016 the increase will be 4.6 to 10.1 per cent.
In 2017 they anticipate 0.5 to 5.6 per cent, and in 2018 the prediction is 1.7 to 5.0 per cent.
The group of so-called Non-City commentators include many household names in terms of management and economic consultancies. They are Beacon Economic Forecasting, Cambridge Econometrics, CEBR, EIU, Experian, IHS Global Insight, the IMF, Liverpool Macro Research, the NIESR, Oxford Economics and PwC.
Their forecasts broadly mirror those of the City commentators.
As always with house price forecasts, there must be numerous health warnings.
Firstly these are purely forecasts, and have less reliability the further they look into the future, due to unforeseen events. Secondly they are averages and so exclude, obviously, regional variations. Thirdly they do not take into account general inflation and how that may erode the apparent house price growth.
Nonetheless, this data is part of the information assessed each month by members of the Bank of England Monetary Policy Committee when they decide whether to change base rate.
Comments
money for everyone! except the young without smart parents :]
So.... The B of E Monetary Committee yesterday forecast a steady rise in interest rates from later this year through 2015 (although 'not to the level pre-crash'). At the same time, inflation is steadily growing (just ask most home owners how much their energy bills have increased), and mortgage lending has predictably tightened (leaving most buyers trying to find more as a deposit, and with lower loan to value and loan to income ratios). And the economists predict price increases at a median of over 10%..... How!
If these figures are to be believed there is a clear North/South divide in place and the Government needs to look at two markets in their future policies. Surely it is possible, based on post code areas, to instruct banks to charge a higher rate of interest on borrowing in those areas where there is rampant inflation to quell any upsurge in this inflation whilst leaving the North West and North East at lower rates to encourage spend. Currently the market is continuing to be difficult in those parts and in the north in general where buyers still need encouragement to buy.