Property prices finally seem to have hit the bottom

Property prices finally seem to have hit the bottom

16:18 PM, 31st May 2011, About 13 years ago

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House prices were up 0.8% in April – the first time prices have crept above zero in 2011 and the highest monthly growth since January 2010, according to the Land Registry.

Year-on-year, house prices are down 1.3%, but even this is a slowdown on last month’s figure.

The Land Registry statistics underwrite those from other house price surveys that report the market is stabilising.

The study shows the average house price for England and Wales is £163,083.

Unsurprisingly, as a result of the mortgage squeeze, the average number of homes that have changed owners in the year has dropped from 54,479 from between November 2009 and February 2010 to 46,818 between November 2010 and February 2011.

Home values set to soar by 16%

Meanwhile, more housing market research by financial think tank the Centre for Economic and Business Research (CEBR) also predicts property prices are about to stop sliding.

Economists and statisticians at the CEBR reckon prices will go down another 1.4% this year and then soar by 16% to regain the peak of 2007 in four years.

They expect the average house price in 2015 to hit £205, 643. The trigger for increasing house prices is the lack of new homes under construction and the likely low number of new home starts in the pipeline over the next few years.

Douglas McWilliams, chief executive of CEBR, said: “We still believe house prices will fall this year, although there are signs prices will stabilise over the second half of the year.

“We think the market is currently close to the bottom for the UK.

Housing shortage will drive prices

“The main factor in driving house prices up is the shortage of available housing – which has already pushed up rent. Housing completion fell to only 130,000 in 2010, well below the level required to keep pace with demographic change.”

CEBR also expects household spending to stay at low levels as families with financial worries continue to watch their bank accounts.

After a 0.8% fall forecast for this year, the CEBR calculates consumer spending will rise by around 2% a year between 2012 and 2015.

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