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TODAY'S OTHER NEWS

House prices to rise by 20% in next four years

The average house price in the UK is set to increase by over 20% to £236,691 by the end of 2019, according to a forecast from BNP Paribas Real Estate.

The global property adviser calculates that by the end of this year, the average house price in the UK will have increased by 4.7% to £206,314.

The forecast suggests that the strongest growth in the next four years will occur in the service sector-dominated economies of the south of England.

BNP Paribas predicts that prices in the South West will have risen by 33% by the end of the decade and that during the same period average prices in the South East will increase by over 27%.

The report indicates that the weakest growth over the next four years will be in the North at 8.1%, bringing the average house price in this region up to £134,249.

The average London home is forecast to see growth of 16.1% from now until 2019, with the average cost of a home rising to £529,660.

“Regions with a greater economic contribution from the service sector will see stronger price growth, particularly where there is still a degree of catch-up following the financial crisis,” says Adrian Owen, head of residential at BNP Paribas. 

“In contrast London will, on average, see relatively weak, below-trend growth over the next four years,” he says.

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    because that isnt a recipe for disaster

    Fake Agent

    Indeed. Endless growth is always reported as if it's a good thing - something to be celebrated - but in truth it's just not sustainable. Something needs to be done to get house prices back down to something approaching reasonable, but that doesn't really fit with this government's agenda, so prices are just going to keep rising and rising for eternity at this rate. Sad state of affairs.

     
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    In my experience the only thing 'certain' about property forecasts is ''they are always wrong'' - it just depends on ''how wrong''.

    Check the last 10 years of property forecasts from just about everyone. (Last time 'The Halifax' gave such a wide growth range, they could not miss their forecast - so that does not count)

    BTW I thought the average London home was already £500k - add 16% to that and it becomes £580k, not £529k

    Fake Agent

    Yep, like the weather forecasts, they more often than not get it wrong. But every property forecast for the last 10 years or so could just have said "prices keep rising" and they would have been on the money. It's getting out of all control now. When does it stop? When does someone intervene? When the average house price in London reaches a million? When the average price for the whole UK reaches £500k.

    Prices going up and up to ridiculous levels isn't good for the housing market, it's not good for the PRS or letting agents or landlords or agents. Sellers might see it as a good thing - with the price of their homes rising massively in value over a short space of time - but it's risky for sellers too with the threat of the housing bubble bursting. There would be all sorts of issues over negative equity and mortgage repayments.

    I don't fully understand the ins and out of it, but surely there comes a point when a ceiling is reached, where prices can rise no further without it having a serious detrimental effect on the housing market as a whole.

    Of course, it's mostly an issue of supply and demand. Demand continues to outstrip supply. Until something is done about that - and not just in the form of hollow PR schemes like RTB, Help to Buy and Build to Rent - then this situation, you fear, will continue to get out of hand.

     
  • Richard Copus

    Yet another forecaster looking into their crystal ball to get some publicity. I would like to know how BNP Paribas come to their conclusion that house prices down here in the-south west will rise far higher than anywhere else. Even including Bristol and the M.4 corridor there is little evidence to substantiate such growth. Also, how can anyone predict what is going to happen in 4 years when we have a major referendum in June which will affect our economic future, whichever way the vote goes, and international markets are still unstable? As Fake Agent says, the demand v supply equation can only work up to a point.

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