A new report from one of the biggest financial services companies in the UK
has predicted that property investors could see house prices remain subdued for the remainder of the decade. The PricewaterhouseCoopers (PwC) UK Economic Outlook
says house prices have a 12 per cent probability of reaching the levels seen before the recession by 2015, but a more likely 53 per cent chance that they will hit that target by 2020.
The median projection for real house price change is one per cent above peak house values by 2020, but prices are expected to drop by 12 per cent by 2015, thanks to declining incomes and the refusal of banks to offer credit. John Hawksworth, chief economist at PwC, said: "Later in the decade, however, we do expect stronger house price growth as supply shortages reassert themselves and credit availability gradually returns to more normal levels."
PwC predicts that those willing to invest in the property market over the longer term will be among the main beneficiaries of future changes in house prices. The Royal Institution of Chartered Surveyors recently reported that demand for UK properties did not rise in June, while supply dropped as vendors held back from putting homes on the market.
- Thursday 14 July 2011