A new report from the National Housing Federation (NHF) has claimed the average house price in England will rise by 25% over the next five years, to reach £274,700.
The document – researched by independent economists Oxford Economics – predicts house prices will fall in 2009, start to recover in 2010, and then rapidly increase from 2011.
A report this week from Hometrack noted house prices had fallen for the tenth consecutive month, with a continued pessimistic outlook for the rest of the year.
The NHF's report also states that though demand is growing, supply of new housing is falling, with only 75% of the new homes required being built each year.
In addition, the document reveals that the least affordable place in 2007 was London, where a typical home was 14.2 times local salaries, compared to a national average of 11.2.
The NHF said that despite some calls to the contrary it is critical that the Government continues to invest in new social housing – as one in every thirteen households is now registered as being in need of an affordable home.
David Orr, chief executive at the NHF, said: “It is clear that even with house prices falling, affordability has not improved one iota. Ministers need to support housing associations in developing mortgage rescue schemes that prevent households from losing their homes. They should also support housing associations in buying up unsaleable private developer homes of a sufficient standard.”
