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What will happen to houses prices in five years time?

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Introduction

What will happen to houses prices in five years time? Introduction For millions of Britons their property is not just a roof over their heads it is a passport to financial security and even a pension. Anything that endangers the seemingly never-ending rise in house prices is always news. The aim of this coursework is to find out what the house prices will be in five years time. I am going to research the housing market on the internet and send out questionnaires to a range of estate agents. In Gordan Browns 1997 budget speech he said, "I will not allow house prices to get out of control". However ten years on and they have spiralled leaving thousands of people unable get onto the first step of the property ladder. So do we now need a crash in the housing market to level the playing field once more? Are crazy house prices creating a new generation of renters unable to buy? I believe that house prices will steady and will not rise to much in the next five years as there is currently a crisis with first time buyers who cant afford to buy their own homes. However I don't believe there will be a decline in house prices as therer is still a great demand. Background On Tuesday the 2nd of October, the Office of National Statistics (ONS) said that UK house prices had raised by 204% in the past decade compared with a 94% increase in average wages. ...read more.

Middle

Diana Choyleva Dec 2006 10-15% For 2007 Ms Choyleva does not believe that there is currently a bubble in the housing market but does see a bubble developing if double digit growth happens in 2007. Evan Davis Dec 2006 5-10% For 2007 Evan has a knack of making the subject of economics interesting to the man on the street. He's normally pretty down to earth aswell but we're not sure about his prediction for 2007 but only time will tell! N/A Sep 07 10% for 2008 (London Prime) Knight Frank predict that prices for prime residential properties will amount to about 10 percent. N/A May 2007 8% For 2007 Britain's biggest building society reckons that house prices will end this year up about 8% Martin Ellis Dec 2006 8% For 2007 (London) (DOC) London is still the blue eyed boy when it comes to house price growth predictions with doubling their UK prediction for London. N/A Dec 2006 7% For 2007 The CML's members are banks, building societies and other lenders who together undertake around 98% of all residential mortgage lending in the UK. N/A Dec 2006 7% For 2007 RICS is predicting that affordability and accessibility for first time buyers will continue to worsen in 2007 but conversely it still predicts a rise for house prices. N/A Dec 2006 7% For 2007 (UK) Strong demand and short supply are the economic arguments that Savills are using to back up their 2007 prediction. ...read more.

Conclusion

However Cook and Co said there has been a decrease in the demand for larger houses due to the mortgage rated being so high which is preventing people from being able to afford bigger houses which has lead to the fall in demand. Evaluation I have investigated what is going to happen to house prices and from looking on the internet and from surveying estate agents I have found: * It is unlikely for there to be a crash in the housing market. * House prices are likely to increase a small amount but this varies depending on the area and the size of the house. For example house prices in London will continue to rise because there will always be a great demand. Also there is more of a demand for smaller houses so their cost will go up faster than larger ones. * The demand for houses is greater than the supply therefore it is unlikely for prices to decrease greatly. However while demand from first-time buyers plummeted sharply, adding to widespread evidence that the housing boom could be over. * With fewer home-buyers taking out new mortgages, it seems likely that house prices will ease during the rest of the year as the number of sales declines. * People are struggling to afford mortgage repayments with the interest rates increasing therefore they can't afford to buy larger houses which is leading to their value decreasing. * It now seems clear from all available evidence that the housing market is slowing down, with prices cooling off while both house sales and new mortgage approvals are dropping. ...read more.

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