The average house will cost over £300,000 by 2020, according to research published by the Centre for Economics and Business Research (CEBR) today.
The Housing Futures research predicts an increase of 197% on today’s typical home value over the next 17 years.
House prices in London are expected to rise to the highest level, with the value of the average house increasing from £183,262 in the first quarter of 2002 to £595,164 in 2020 – an average annual growth rate of 6.76%.
But CEBR predicts that prices in the East of England will increase most, from £109,166 in the first quarter of 2002 to £368,058 in 2020 – an average annual growth rate of 6.99%.
Houses in the North East will remain the cheapest, rising from £64,436 in the first quarter of 2002 to £123,651 in 2020, equivalent to an average annual growth rate of 3.69%.
For the UK as a whole, house prices will grow an average 6.24% pa, from £101,164 in the first quarter of 2002 to £300,643 in 2020.
CEBR predicts that the rise will be 6.55% between 2000 and 2010 or a hike of £87,777 in 2000 to £165,618 in 2010. It then forecasts a 6.14% rise between 2010 and 2020, from £165,618 to £300,643.
The report states that the incremental increase in house prices across the UK will be caused by “a much faster population growth than previously assumed”, and a lack of sufficient new houses.
CEBR’s Douglas McWilliams said: “Although there is a green paper on the reform of the planning system, we are not convinced that this will have significant impact on the housing market of tomorrow.
“The result of this will be to create a chronic housing shortage, which will force average house prices up faster than average earnings, especially in London and the South East.”
EGi News 22/04/02
