A new report released by the Centre for Economics and Business Research (CEBR) has forecast that the fall in house prices will come to an end in 2009 and then be followed by three years of rising prices, resulting in an overall rise in prices of 30%.
This will be welcome news to the many worried homeowners concerned about the poor housing market rates and its uncertain future.
According to CEBR’s predictions the average price will reach a new peak in 2012 at £226,000. Many homeowners, who purchased homes in the last few years, will breathe a sigh of relief and can look forward to the future growth after they will see an end to problems of negative equity which is likely to hit 1.7m homeowners at the end of the slump in prices. Unfortunately many have been unable to afford the repayments and have had their homes repossessed already but hopefully those struggling now will be able to make it through this storm and will welcome this glimmer of hope.
CEBR has based this prediction on a lack of new homes available on the market so as demand outstrips supply prices will start to rise again. Recently many house builders have announced they have pretty much stopped building houses because of the doubts in the market and low availability of mortgages, there is no-one to buy their houses. When the market becomes more stable and confidence returns demand for new houses will return and continue to grow, fuelled by the number of single people and the rise in immigration.
Supporting CEBR predictions is the National Housing Federation saying they believe the market recovery would begin in 2010 and a quick rise in 2011.
There is also a possibility that the Bank of England will try to hold the base rate at 5% for the remainder of the year, and look at reducing them possibly as low as 4.25% at certain points in 2009. This will certainly help the mortgage market recover and start to grow again. Hopefully market confidence will have returned and will likely to be boosted by lenders looking to restart their mortgage portfolio.
Mortgage rates are continuing to improve as the market gets more competitive, using a mortgage broker you can run mortgage quotes to help you find the best mortgage deal whether you existing mortgage deal is coming to an end or you are looking to get your first mortgage.
