House prices to rise 50% in 10 years, say estate agents

Image source, PA

The price of the average UK home will rise by 50% in the next 10 years, say the National Association of Estate Agents and the Association of Residential Letting Agents.

They forecast that average prices will rise from 拢280,000 to 拢419,000 by 2025.

London house prices are forecast to nearly double to 拢931,000.

The average cost of renting a home in the UK is forecast to rise too, though by only 27%, taking the average rent from 拢134 a week to 拢171.

Mark Hayward of the National Association of Estate Agents (NAEA) said: "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.

"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," he added.

Long-term projection

Despite the big headline numbers in the forecast from the estate and lettings agents, the predicted rise in house prices assumes that the increases seen in the past 10 years or so will simply continue for the next decade.

That would mean UK average prices rising by 4.1% a year, and average London house prices rising by 6.3% a year.

The predicted rise in rents is even slower, at 2.5% a year across the UK as a whole in the next decade, and 3% a year in London.

That would take average weekly rents in the capital, from 拢234 now, to 拢314 by 2025.

The figures have been compiled for the estate and letting agents by the economics consultancy the Centre for Economics and Business Research (CEBR).

Its analysis argues that the recent decline in the rate of home ownership will boost the demand for rented homes.

So the report forecasts that the proportion of households living in private rented accommodation will rise, from 20% now to almost 29% in 10 years' time.

The projection from the estate agents comes as the Land Registry reports that house prices, in England and Wales, rose by an average of 0.4% in November.

That left the annual growth rate at 5.6%, the same as in October.

The Registry's figures, which include the many cash sales but exclude newly built properties, leave the price of the average home at 拢186,325.