House Demand To Outweigh Supply
Although the latest house price information is another fall in July, the NHF is predicting that house prices will begin to rise again from 2010 as supply will not be able to keep up with demand. The NHF also calls on the Government for more action to help people in difficulties.
Just as more news came through of house price falls in July, the National Housing Federation (NHF) came up with a defiant prediction that house prices will rise by 25% in the next five years.
This will be seen as good news by homeowners who have watched the values of their properties sink in the last six months, taking many into negative equity for the first time since the 1990s.
The downturn in the housing market, said the NHF, would be over by 2010, and rising prices would return. It based its forecast on the shortage of property across the country; it is so pronounced that the decline in the market cannot possibly become a full blow-out.
The research for the NHF, carried out by Oxford Economics, said, however, that in the short term prices would continue their downward trend, falling a further 2.1% in 2009, before nudging back up in 2010, by 1.3%. This would be followed by a 5.2% rise in 2012 and 9% rises in each of the following two years.
Problems for housebuilders on the stock market has resulted in a cut-back of house building. Only 75% of homes that are needed are actually being built each year: 167,577 were built last year, and the number is going to be lower for 2008, probably around 120,000. It is estimated that some 223,300 new households will be created each year for the next 18 years, so the number of houses being supplied will be way short of demand.
Chief executive at the NHF said the Government must support associations in developing mortgage rescue scheme of people in difficulties, and should buy up unsold properties.
Meanwhile, Hometrack reported that house prices fell for the tenth month in succession. Prices are now down 4.4% in the past 12 months. East Anglia saw the biggest fall in July: 1.4%. Greater London, South East, South West and East Midlands saw 1.3% drops.
