House prices to fall in 2011 but bounce back strongly
A new report from a leading economic think tank suggests that house prices will continue to fall in 2011 before recovering strongly from 2012 to 2015.
The Centre for Economics and Business Research (CEBR) says that it expects house prices to fall by a further 1.4 per cent this year but a lack of supply of new houses will be a factor contributing to a 16 per cent increase in house prices by 2015.
House-building currently stands at its lowest level for 90 years and the number of first-time buyers is at a record low. In addition, there are nearly five million people on the waiting list for social housing.
CEBR chief executive Douglas McWilliams said: “We think the market is currently close to the bottom for the UK. “The main factor in driving house prices up is the shortage of available housing – which has already pushed up rent.”
The centre also expects household spending to remain muted. The CEBR expects consumer spending to fall by 0.8 per cent this year and then grow by just two per cent each year from 2012 to 2015. However, online sales are expected to rise by about 50 per cent by 2015 from £22.9 billion to £32.3 billion.
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