UK house prices not likely to rise in 10 years

A new report from PwC suggests that house prices in 2015 will be below 2007 levels.

By New Statesman Published 13 July 2010

House prices in the UK are unlikely to rise above pre-recession levels for a decade or more, says the country's leading accountancy firm PricewaterhouseCoopers (PwC).

In its Economic Outlook report, PwC showed there was a 70 per cent chance that the real cost of housing in 2015 would be below that in 2007. There was also a 50 per cent chance that it would take until 2020 for the property market to rise above its previous peak, it added.

PwC termed housing "a risky asset", which no longer guaranteed positive real returns in the future.

The continued depression of real-term prices (allowing for inflation) of property have been attributed to slow growth in disposable incomes due to tax hikes and little pay growth, rising interest rates and a weak economic environment.

The report predicted "fairly flat house prices" in the second half of this year given earlier increases, and little movement in real terms, even if house prices in 2010 are on average 5 per cent higher in cash terms than last year.

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2 comments

Sat, 2010-07-17 14:44 — elevengoalposts

So why would anyone want to buy a house in the foreseeable future, except in certain locations/regions and when in a particularly sound financial position - which is not "guaranteed" anyway?

Account for the debt servicing, maintenance, rates/taxes/duties whatever, inflation, then take into account the risks involved in job loss and house price deflation.

In other words, for many you'd be a mug!

It looks like the bloodsucking "housing industry" is in for Hard Times, and we're "all broken up about their hard times"!