House price rises for four years

FEARS of a property market crash will vanish next year as prices begin to rise again, a study predicts. It says that despite the current fall in the value of many homes, a more settled picture will emerge next year.

After that, prices will gradually climb for the next few years, according to a survey by Your Mortgage magazine.

It forecasts a dramatic narrowing of the North-South divide, with prices expected to soar by nearly 21% in Yorkshire and Humberside. In London and the South East, however, the increases will be nowhere near as great.

The most detailed study this year of the housing market concludes that the prices boom of the last few years will be replaced by much-needed stability - but there will be no crash. By 2008, prices will have risen on average by around 13%, says the report.

Using a mixture of local and national economic data, the survey enables homeowners in England to see how much their properties could be worth in future.

The statistics were compiled by data analysts Prophit, using prices from the Land Registry, interest rate forecasts and figures on unemployment and population shifts.

By 2008, properties in Manchester, Cheshire, West and North Yorkshire, Lancashire, the North West and Tyne and Wear are expected to have gone up by more than 15%.

Analysts say Copeland, in Cumbria, can expect a 21.9%increase, while in European Union Commissioner Peter Mandelson's old constituency, Hartlepool, growth is put at 19.1%.

London prices are expected to go up by an average 13.8% over the same period.

House prices in West Sussex are also expected to rise by 13.8%, in Surrey by 13% and in Oxfordshire by 13.3%.

However, in Corby, Northamptonshire, values are forecast to increase by just 4.9% in the next four years, and in Leicestershire by 7.1%. But in all areas prices are expected to rise.

Andrew Stuart, editor-in-chief of Your Mortgage, said: 'Our forecasters believe that house price inflation will cool off across the country over the next five years, with small falls in some areas during the second half of 2004.

'But by the end of 2008, prices throughout the whole of England will have increased compared with where they are now, which confounds those pundits who have been predicting a crash.'

He added: 'Overall, the forecasts are pretty much in line with general inflation and possibly less than the expected rise in average wage inflation to the end of 2008.'

The magazine's editor, Paula John, added: 'This study shows that there is nothing to panic about. We are not going to return to the crashes of the 1980s and 1990s. Probably, from the beginning of next year, we will see things steadying out.

'The last five years have seen boom and boom. But over the next five years we will see a steady, comfortable increase in average prices.'

Other studies show that asking prices for houses have recently fallen by an average £ 4,000 nationwide.

A series of interest rate rises led to a fall in prices of up to 2% in England and Wales between July and August, say analysts.

A recent report from the National Association of Estate Agents said that the average price of a home dropped by 0.11% during July.

The findings echo a study by the Royal Institution of Chartered Surveyors, which claimed that the housing price boom 'is now over'.

Useful links

Create a FREE account to continue reading

eros

Registration is a free and easy way to support our journalism.

Join our community where you can: comment on stories; sign up to newsletters; enter competitions and access content on our app.

Your email address

Must be at least 6 characters, include an upper and lower case character and a number

You must be at least 18 years old to create an account

* Required fields

Already have an account? SIGN IN

By clicking Create Account you confirm that your data has been entered correctly and you have read and agree to our Terms of use , Cookie policy and Privacy policy .

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in