Good News of Rising House Prices from the CEBR will be Welcomed by those in Negative Equity
Homeowners that have failed to remortgage due to a lack of equity should take heart in the recent forecast of house prices from the Centre for Economic and Business Research (CEBR). They have forecasted an increase in house prices of 15 per cent over the next five years due to a shortage of homes. The shortage of homes will put them in higher demand and will increase the average house price in the UK.
The lack of buyers has pushed supply upward to the point that fewer homes are being built. This is going to lead to a shortage of properties. Most households are forced into renting due to the lack of opportunity to acquire lending. Others choose renting in an effort to avoid mortgage debt while house prices are falling in many areas. The forecast of rising house prices over the next few years will come as good news to those wanting to sell, wanting to remortgage, and those in negative equity.
Douglas McWilliams, chief executive of CEBR, said, “It is important to realize that the UK has a housing shortage, which is shown by the recent rises in rents.
“In addition, the very weakness of the economy, which will almost certainly mean more quantitative easing by the Bank of England, means that gradually mortgages will be easier to come by.
“By 2016 we are forecasting 740,000 new mortgages a year – up from an estimated 560,000 this year but only just over half the peak 2006 level.
“Both the shortage of supply and the growth in mortgage availability will push up house prices, though only slowly at first.”