House price fluctuation is often hard to predict due to the many external factors that it can be affected by. Currently, house prices are racing once again and London is in its own house price ‘superbubble’, so what can we expect in the future for UK house prices?
Confidence in the housing market has hit a 3 year high as 71 per cent of people expect prices to continue to climb and 56 per cent think that now is a good time to sell. This figure is even higher when you only consider owner-occupiers, amongst whom 62 per cent think that the time is right to sell. Positive sentiment towards offloading property is at it’s peak in the East and South East of England, where a majority of 65 per cent of those polled by the Halifax Housing Market Confidence tracker said that they believe now is a good time to sell, compared to a national low of only 36 per cent in Scotland.
According to the Royal Institution of Chartered Surveyors, they expect the average UK house price to rise by six per cent a year for the next five years. Experts forecast that this will end up leading to a 35 per cent increase in the value of UK property by 2020.
The RICS also reports that many middle-income families will turn to renting as they are frozen out of a frenzied property market. This is good news for those who are currently homeowners, but certainly not cause for celebration for first-time buyers. However, it is not all bad news for first-time buyers as the CML have reported that £3.1 billion worth of home loans were handed out to first-time buyers in February, a 55 per cent increase on February 2013.
A chronic shortage of homes on the market means that some homeowners are unwilling to move house for fear of not being able to find a new place at a reasonable price. This is further restricting supply in a market with incredibly high demand.
The recent increase in optimism however, is partly due to the stronger house prices caused by shortening supply, this shift could provide a much needed increase in the supply of properties and also contribute to further increase in prices.
So how much will properties cost?
The expected average price for a house in London in 2020 is estimated to be £567,051 a national high compared to £131,947. The rest of the top 5 annual increases is made up of the South East, South West, Yorkshire and Wales in that order.
But what does all this mean for the average buyer? Homeowners should be fairly safe, but first-time buyers, as mentioned earlier, are going to be put in a difficult situation, where, depending upon their income, they may find it very difficult to step on to the first rung of the property ladder.
Remember though, this is only speculation, and anything could happen within the next few years. The unpredictability of the real estate market means that literally nothing is ever certain until it happens.
Author Bio: Bradley Shore is an experienced author who has been blogging for a number of years, he has wrote for many clients such as innovo property uk and tends to base his writing on real estate or investment.
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