The prevalence of predications is also confusing for property landlords who are planning their future business on the figures which change regularly.
Now the independent Office for Budgetary Responsibility (OBR) has announced that it has reviewed its forecast for UK house price growth.
With the economy picking up once more, the OBR has announced that house prices will rise by 27% by 2019; that’s much higher than their original 15% forecast.
The organisation has broken down the figures and predict growth of 3.7% in 2013/2014, 5.8% for 2014/2015, then 7% the year afterwards and 4.2% after that.
In 2017/18 house prices will grow by 3.7% and finally by 3.8% in 2018/2019.
Strong house price growth in 2014
In addition, the OBR is also revising upwards its prediction for transaction volumes and say there will be 1.3 million such transactions, which is 12% higher than they originally forecast last March.
In its report, the OBR states that the UK’s housing market is picking up at a stronger pace then had been forecast with house prices going up by 3.8% up to September, with the number of property transactions rising by 22.6% in the same period.
This has resulted in their forecast for house price inflation to be revised to reflect the growing momentum in house prices seen this year and the increasing availability of mortgage and finance products.
However, the OBR is also highlighting that the country’s household finances are struggling with the gross debt to income ratio rising.
Their report says that the house price predictions may be undermined should interest rates rise and schemes such as the ‘Help to Buy’ coming to an early end.
House price growth could be undermined by interest rate rises
There are also keen to point out that while house prices will stage a strong recovery, they will still be 3.1% lower in 2018 than they were at their peak of the housing boom in 2007.
The OBR prediction for a rapid rise in house prices has been echoed by international real estate firm Knight Frank which calculates that house price growth will be 24% from this year until the end of 2018.
However, Knight Frank is predicting stronger growth next year of 7%.
The firm’s head of global research, Liam Bailey, said: “The OBR has reviewed its prediction for house transactions believing that growth for the current property market recovery will spread into the Midlands and North.”
He added that in addition to a strengthening economy, the government’s Help-to-Buy scheme is also having an impact and will help support higher house price growth in the UK in the next two years.
