UK house prices 'to soar 30% by 2019'
UK house prices are predicted to climb by 30% by 2019, according to the CBRE. The real estate operator claims UK house prices will climb 12% in the next 12 months as the market plays catch-up with prices rises in the capital.
However, prices in many parts of the UK still remain well under peak levels - and the expected arrival of an interest rate hike at some point this year is likely to undermine consumer confidence (as well as drive up the cost of borrowing).
So, is a 30% uplift in prices realistic? %VIRTUAL-SkimlinksPromo%
Wage growth still weakIn some parts, very likely not. There has been at least an 8% fall in real wages since 2008. Many parts of the UK's service economy - where much job growth, full and part-time, is created - still has wage growth firmly pinned to the floor.
In parts of Northern England, house prices are as much as 25% lower than they were in 2008. Household debt remains high, regardless of region and loan-to-income ratios are at breaking point for many.
(It's estimated 25% of people between 20 and 34 still live with their parents because of the pressure of housing costs and only 3% of buyers are now aged between 18 and 30.)
Room to improve?In the South, the future house price gains predicted by the CBRE look more realistic. "In the southern regions," says the CBRE, "where nominal house prices have now recovered to the pre-crash peak, real prices are still around 12% lower than peak."
However almost anywhere you look, the figures are highly polarised, not to say patchy. Recent Land Registry data - their information is an accurate bellwether, being based on real sales data - revealed only two UK regions outside London seeing any recent growth at all.
The South East as a whole saw a 0.6% uplift on May while West Midlands prices climbed 1.9%, the overall biggest gainer. However Yorkshire and Humber saw falls, with prices down more than 1.2%; North East saw prices skid 1.0% lower.
London loses fizzMeanwhile, back in the Capital, house prices inched 0.1% in June to £437,608. A rather more subdued performance given the earlier stellar rises.
"The time on the market," says Hometrack, "remains flat at an average of 6 weeks nationally, but there has been a slight rise in London from a recent low of 2.7 (Mar-14) to 4.3 weeks. It's also starting to rise in the South East...elsewhere the downward trend continues."
The Land Registry claims the most expensive sale in June 2014 was in Knightsbridge, London SW1 for £11.75m while the cheapest sale in June 2014 was located in Choppington in Northumberland, for £11,500.
CBRE house price growth forecast