House prices to double
20 April 2003
According to reports published later this month, house prices are set to double during the next two decades.
This will mean that by the year 2020, house prices will have risen so much that homeowners will be able to take a year off work and fund it by the equity in their property.
A report published by the Centre for Economics and Business Research (CEBR) believes that house prices will continue to rise at a faster rate than earnings over the next two decades. This will mean an average increase of 5.2% a year.
The group predicts this will lead to a "significant rise" in the number of people tapping into the wealth accumulated in their property through equity release schemes.
At the present time the average homeowner has a mortgage of approximately 45 per cent of its value. By 2020, the average value will have risen to £280,000, with a mortgage of only 35 per cent.
This will all be despite an appreciable slow in the property market.
'Although the housing market will slow appreciably over the next few months, residential property remains an excellent investment - over the next decade house prices will rise by an average of 5.2%.'
'But because we fail to build houses fast enough to meet rising demand, we can expect a return to relatively high rates of house price inflation when consumers' confidence and the economy picks up again', said a spokesman for the CEBR.