House prices in the UK are set to rise by a cumulative 33% between 2007 and the end of 2017, with prices due to rise by an average of 2.5% this year – and by 6.1% next year.
The predictions are from BNP Paribas Real Estate, whose annual house price forecasts are put together with Patrick Minford, Professor of Economics at Cardiff Business School.
London is set to lead the UK house price recovery with 69% cumulative growth between 2007 and the end of 2017. Growth last year in London was 1.6% and growth this year will be 6.8%, but in 2014 it is forecast to rise to 8.6%.
The South-East (outside London) is predicted to have cumulative growth of 50% between 2007 and the end of 2017, with growth this year of 4.3%.
The South-West follows with 43% predicted growth between 2007 and the end of 2017, with growth this year forecast at 2.2%. The Eastern regions and West Midlands have cumulative price growth predicted of 38% and 25% respectively.
Between 2007 and 2017, East Midlands will see cumulative growth of 29% and Yorkshire will see cumulative growth of 16%. The lowest growth is forecast in the North-West and North-East, with cumulative rises in house prices predicted at 13% and 12%, respectively.
Joanne Warren, associate director within BNP Paribas Real Estate’s research department, said: “As the housing market recovery gains strength and demand levels grow, the pace of price rises will accelerate.
“Next year UK house prices are forecast to grow 6.1%, which is more than double the 2013 rate. The growth rate will then increase year on year and in 2017 UK house prices are forecast to rise 8.0%.
“Although positive growth is forecast for 2013 and 2014, it will not be until 2015 that [average] UK house prices return to the 2007 pre-recessionary market peak.”
Comments
Can I predict that many of the above forecasts will turn out to be utterly wrong if interest rates rise by half a percent even.