House prices will soar by 50 per cent in the next 10 years according to research commissioned by the NAEA and conducted by the Centre for Economics and Business Research.
With the average house price currently around £280,000, the Housing 2025 report predicts house prices will reach an average price of £419,000. In London prices are expected to nearly double in the next decade, rising from £515,000 to £931,000.
Lower home-ownership rates amongst the working age population and the ageing of the baby-boom generation will continue to drive a decline in the proportion of UK households that own their own home.
Currently around 62 per cent of the working population owns their own home; the Housing 2025 report predicts this will fall to 55 per cent in the next 10 years.
“House prices are only going to go one way, and unfortunately that is up. For so many already priced out of the market, this is news aspiring house buyers will not want to hear” according to NAEA managing director Mark Hayward.
“Ongoing house price inflation, combined with low wage inflation, tighter lending restrictions and a shortage of affordable housing, means owning a home will continue to be distant dream for many. Increased rental costs will also make it more difficult for current renters to save for a house deposit; as much of their income will be eaten up in rent” he says.
The association wants the government to revisit the idea of reducing the area of the Green Belt, and believes the government should add construction sector occupations such as brick layers to its ‘shortage occupation list’ making it simpler for employers to hire non-EU nationals.
Longer term, the government should incentivise firms in the construction sector, to offer more apprenticeships and training programmes, form an advisory body in the shape of an independent housing policy committee, and offer a stamp duty exception to pensioners looking to downsize their property.