What crash? Average house price ‘to hit £300k by 2025’
AVERAGE house prices will top £300,000 by the middle of the next decade, according to a report.
The value of a typical home in the UK is expected to jump from last year’s £212,000 to £302,000 by 2025.
The forecast, from accountancy firm PricewaterhouseCoopers, will ease fears of a painful slump in property prices as Britain leaves the European Union.
But the report suggests prices are not rising as fast as they have in recent years – with London suffering the sharpest slowdown after increases in stamp duty on expensive homes. PwC also warns that the UK economy is cooling in the wake of the Brexit referendum as rising living costs eat into family budgets.
The economy is on course to grow by 1.5 per cent this year and 1.4 per cent next year, following expansion of 1.8 per cent in 2016.
‘Economic growth held up better than expected in the six months following the Brexit vote, but slowed in the first half of 2017 as inflation rose sharply,’ says the PwC report, which is published today.
A string of reports in recent weeks have suggested that the housing market is running out of steam – sparking fears that the property bubble is about to burst.
Earlier this month, mortgage lender Halifax said house prices fell by £70 a day in June amid mounting pressure on family finances from subdued wage growth and the rising cost of living.
But PwC still expects the price of an average home to rise by 3.7 per cent this year to £220,000, and by a similar rate next year to £228,000.
While this is considerably slower than the 7 per cent rise seen in 2016, it suggests that the property market is not heading for a cliff edge that could leave millions of families in homes worth less than they paid for them.
The PwC report says the sharpest slowdown in house price growth has been in London. The capital’s property market has been hit by higher rates of stamp duty brought in by former Chancellor George Osborne.
The increase has pushed up the levy on a £2million home by £53,750 to £153,750.