As the UK economy stutters back into life the outlook looks bright for those owning or aspiring to own their own home with yearly increases of £9,000.
And in a double boost, mortgage rates have hit record lows as the high street feels the effects of action to breathe life into a previously stagnating housing market.
The positive picture comes in a top-level report by the respected Centre for Economics and Business Research. Experts said the average UK home would be worth £267,000 by 2018 - up from today’s £222,000.
The boom equates to a £25-a-day - or £750-a-month - increase in value and proves action is working to drag the housing market out of the doldrums.
The news quickly follows Chancellor George Osborne’s budget “to get Britain moving again”, which contained a raft of measures to help people get a foot on the property ladder.
Last night economist and report author Daniel Solomon said: “By 2018, we expect the typical UK home will cost £267,000 – over 20% more than this year.
“Gradual wage and population increases will be the fundamental drivers of this medium-term trend.
“We expect the Chancellor’s new Help to Buy scheme will push up house prices before it raises housing supply.
“We predict the scheme’s effects will be quite modest, but it could support the construction of roughly 5,000 new homes in 2015. This supply boost could provide a welcome route on to the housing ladder for a small number of aspiring homeowners.”
News of a resurgence in Britain’s housing market comes after the Council of Mortgage Lenders reported home loans had got off to their best start since 2008, when the market was at its pre-crisis peak.
Buyers can now pick up some of the lowest rates in history, with one building society offering a two-year fixed rate at a staggering 1.74 per cent.
Lacklustre wage growth, recapitalisation by domestic banks and the deepening Eurozone crisis are expected to subdue house price growth this year.
But next year, the CEBR expects house prices to be 2.3 per cent higher than they were in 2007.
Experts said the predicted strengthening economy will lead to rising wages, while population growth is projected to outpace housing supply increases.
And in a double boost, mortgage rates have hit record lows as the high street feels the effects of action to breathe life into a previously stagnating housing market.
The positive picture comes in a top-level report by the respected Centre for Economics and Business Research. Experts said the average UK home would be worth £267,000 by 2018 - up from today’s £222,000.
The boom equates to a £25-a-day - or £750-a-month - increase in value and proves action is working to drag the housing market out of the doldrums.
The news quickly follows Chancellor George Osborne’s budget “to get Britain moving again”, which contained a raft of measures to help people get a foot on the property ladder.
Last night economist and report author Daniel Solomon said: “By 2018, we expect the typical UK home will cost £267,000 – over 20% more than this year.
“Gradual wage and population increases will be the fundamental drivers of this medium-term trend.
“We expect the Chancellor’s new Help to Buy scheme will push up house prices before it raises housing supply.
“We predict the scheme’s effects will be quite modest, but it could support the construction of roughly 5,000 new homes in 2015. This supply boost could provide a welcome route on to the housing ladder for a small number of aspiring homeowners.”
News of a resurgence in Britain’s housing market comes after the Council of Mortgage Lenders reported home loans had got off to their best start since 2008, when the market was at its pre-crisis peak.
Buyers can now pick up some of the lowest rates in history, with one building society offering a two-year fixed rate at a staggering 1.74 per cent.
Lacklustre wage growth, recapitalisation by domestic banks and the deepening Eurozone crisis are expected to subdue house price growth this year.
But next year, the CEBR expects house prices to be 2.3 per cent higher than they were in 2007.
Experts said the predicted strengthening economy will lead to rising wages, while population growth is projected to outpace housing supply increases.
It is these two crucial factors that will lead to accelerating house price growth. By 2018, the CEBR forecasts a typical UK home will cost £267,000, as house prices rise by 4.6 per cent over that year.
Incredibly, in five year’s time UK house prices will be 20.4 per cent higher than they currently are.
Last nightindependent financial expert Stephen Bacic urged Britain’s army of first-time buyers to take the plunge and invest in bricks and mortar.
He said: “There is a lot of pent-up demand out there but credit is getting easier to obtain.
“I don’t believe there is ever a bad time to buy a house - people have absolutely nothing to gain by waiting to get on the property ladder. Now is as a good a time as ever.
“What is the alternative? I can’t believe anyone would be happy paying rent to a landlord until the day they die.
“People have to realise that at the end of their mortgage term they will own a house, people certainly don’t want to be using their meagre pension paying for a roof over their head.”
In his fourth budget as Chancellor Mr Osborne was roundly praised for unveiling a £130billion package to bankroll mortgages aimed at helping aspiring homeowners get their first home.
His pioneering Help to Buy scheme is targeted at stimulating supply growth as house builders respond to higher prices.
The scheme was designed to allow those who could only muster a modest five per cent deposit to buy a newly-built house worth up to £600,000 with loans from the taxpayer worth up to 20 per cent of the value of the property.
The loans will be available from January to everyone, with no salary restrictions, and are interest-free for the first five years.
In year six, borrowers will have to pay a 1.75 per cent annual fee, which will rise by one per cent above RPI inflation every year after that.
The Halifax and other major high street mortgage lenders believe the buoyant swell in house prices shows the Government’s Funding for Lending Scheme has been a success.
As house builders are encouraged to build thousands of new properties to help start a new housing boom, the CEBR said the market would soon start to jolt into action.
In 2015, they expect house builders will respond to higher prices, meaning Mr Osborne’s Help to Buy scheme could lead to an additional 4,800 homes being constructed.
Incredibly, in five year’s time UK house prices will be 20.4 per cent higher than they currently are.
Last nightindependent financial expert Stephen Bacic urged Britain’s army of first-time buyers to take the plunge and invest in bricks and mortar.
He said: “There is a lot of pent-up demand out there but credit is getting easier to obtain.
“I don’t believe there is ever a bad time to buy a house - people have absolutely nothing to gain by waiting to get on the property ladder. Now is as a good a time as ever.
“What is the alternative? I can’t believe anyone would be happy paying rent to a landlord until the day they die.
“People have to realise that at the end of their mortgage term they will own a house, people certainly don’t want to be using their meagre pension paying for a roof over their head.”
In his fourth budget as Chancellor Mr Osborne was roundly praised for unveiling a £130billion package to bankroll mortgages aimed at helping aspiring homeowners get their first home.
His pioneering Help to Buy scheme is targeted at stimulating supply growth as house builders respond to higher prices.
The scheme was designed to allow those who could only muster a modest five per cent deposit to buy a newly-built house worth up to £600,000 with loans from the taxpayer worth up to 20 per cent of the value of the property.
The loans will be available from January to everyone, with no salary restrictions, and are interest-free for the first five years.
In year six, borrowers will have to pay a 1.75 per cent annual fee, which will rise by one per cent above RPI inflation every year after that.
The Halifax and other major high street mortgage lenders believe the buoyant swell in house prices shows the Government’s Funding for Lending Scheme has been a success.
As house builders are encouraged to build thousands of new properties to help start a new housing boom, the CEBR said the market would soon start to jolt into action.
In 2015, they expect house builders will respond to higher prices, meaning Mr Osborne’s Help to Buy scheme could lead to an additional 4,800 homes being constructed.
