According to some economists, house prices are predicted to rise by around 16 percent by 2014 when compared to current prices.
In an article in The Telegraph, expert opinions are discussed on the future of house prices. The report states the Centre for Economics and Business Research believes that by the close of 2014 property prices will be 16 percent higher than today. However, it also expects the prices will be only 2.2 percent higher in 2011 whilst unemployment continues to increase as the cuts in the public sector take effect and household incomes remain pressured.
Contrast this prediction with that of a number of other economists and this prediction certainly seems the most optimistic.
Whilst the Centre for Economics and Business Research forecasts a 2.2 percent rise next year, IHS Global Insight’s spokesperson Howard Archer predicts a 10 percent drop over the next twelve months and Capital Economics has forecast a 20 percent fall in the next two years.
Yet the Centre for Economics and Business Research’s chief executive Douglas Williams commented:
“Quantitative easing is a powerful medicine and is likely to have a strong impact on the housing market eventually. House prices may not move much during 2011 but they are likely to rise significantly in the following three years on the back of quantitative easing.”
Its annual predictions include the 2.2 percent rise in 2011, 4 percent in 2012, 5.4 percent for 3013 and 4 percent for 2014. This would then mean the average house has a price tag of over £208k.
Corresponding with such economic measures as quantitative easing and house price rises, interest in the mortgage market will also be boosted.
Indeed, if the centre is correct in its prediction then it has also predicted an expected number of mortgage advances per month. Currently, there are around 47,000 mortgages advanced monthly and it has predicted this to rise to approximately 77,000 in 2014. Those studying for their CeMAP at the moment will be pleased as the demand for mortgage advisors will also rise.