NEW RESEARCH REVEALS AVERAGE HOUSE PRICE TO RISE TO ALMOST £300K BY 2011 » Communities » 24dash.com

The average house price in England will be nearly £300,000 in five years' time, according to a new report published today by the National Housing Federation - the trade body for England's 1400 housing associations.

The new housing market forecasts, produced by Oxford Economic Forecasting (OEF), are published in the Federation's new report 'England's Housing Timebomb: Affordability and supply 2006-2011'. They are good news for current homeowners, but they spell disaster for tomorrow's first-time buyers who will find it increasingly difficult to afford a place of their own.

OEF's projections see the average house price rising from just under £195,000 in quarter one of 2006 to around £286,500 in 2011; a rise of around 50%. This would be of less concern if wage inflation were to match this rate of increase, but it won't: house price inflation will outpace growth in earnings and disposable incomes for every year to 2011.

Non-profit housing associations provide low cost home ownership schemes and affordable rented homes for 5 million people in England. They are building 28,500 new affordable homes a year and refurbishing 10,500. They are doing all they can to help, but they want - and need - to do more.

The National Housing Federation believes around 80,000 new affordable homes a year are needed to avert our housing crisis, and is calling for increased Government funding for housing associations to achieve this.

David Orr, chief executive of the National Housing Federation, said:
"Crisis is an over-used word but I make no apology for using it: we are already in crisis and this report shows that things are set to get worse.

"High house prices are already having a disastrous effect on local communities. People are unable to find a home in the area where they grew up. Parents are forced to work longer hours and travel greater distances. Low-income families are forced to live in poor quality, cramped conditions.

"Over the next five years we'll see home ownership being pushed further out of the reach of middle earners and even those on relatively high incomes.

"Housing associations are part of the solution. They already build and refurbish around 40,000 homes a year for people unable to afford a home at market rates. But up to 80,000 new affordable homes a year are needed to stop our housing timebomb exploding. 

"It's vital that the Government makes affordable housing a priority in next year's Comprehensive Spending Review, and brings in planning reform to speed up the delivery of affordable homes in mixed communities."

ENDS

Press release issued: July 17 2006.