Half of mortgage brokers predict house price surge

Almost half of mortgage brokers expect to see an uplift in house prices of between 2% and 4% during the rest of the year.

Earlier this month estate agency chain Savills revised its predictions for house growth in 2013 up from 0.5% to 3.5% following a boom in the first half of the year.

The latest Mortgage Solutions People’s Poll asked brokers what they thought would happen to property prices and 49% of respondents said they expected a rise of between 2% and 4%.

A further 28% predicted a rise of over 4% across the year with 19% expecting growth of less than 2%. That meant just 4% felt UK house prices would remain flat or fall in 2013.

“A combination of low interest rates and stimulus measures means there is capacity for improved price growth over the next three years or so,” said Lucian Cook, director of Savills residential research.

“But it comes at the price of later price growth in 2016/17 when interest rates are expected to start rising.”

Cook said that the government’s Help to Buy was likely to increase transactions in the housing market but played down fears of a house price bubble on the back of George Osborne’s programme.

“Help to Buy goes further than any of its predecessors in being aimed at all buyers, not just first-time buyers, but we believe its primary impact will be increased transaction levels and that higher than expected price growth is a secondary impact.”

Post courtesy of Mortgage Solutions