In an upbeat assessment of the state of the housing market a major property website has said factors like the rising population coupled with diminishing supply will work in favour of those already on the property ladder.
According to mathematical modelling techniques, the website says that a house in the South West currently priced at £198,000 could be worth just over £260,000 in five years time – a staggering 31.8% rise.
And while Westcountry housing market experts were considerably more cautious in their assessment, they said it was still probable that rises of between 15% and 20% could well be on the cards.
Andy Goundry, a fellow of the National Association of Estate Agents who owns Goundry’s in Truro, was sceptical about the price increase of nearly a third.
However, he added that a 20% rise over the next five years was “realistic and achievable.”
Richard Copus, spokesman for the National Association of Estate Agents in Devon and Cornwall, said there were too many uncertainties in the next few years to say that prices would boom by 30%.
“I’ll eat my hat if they go up by a third,” he said.
However, Mr Copus, a director of Woods Distinctive Homes in Devon, said that did not mean to say the that housing market in the region wasn’t buoyant.
“There is a lot that is good about the market,” he said.
“I think 30%is absolutely twaddle, but I think 15% over that period is realistic.
“At the moment the market is healthy and stable and is the best since the recession.
“Prices are rising and the most important thing is that home owners continue to be reasonable in what they are asking when they put their properties on the market, otherwise they will stay on the market for a long time.”
Mr Copus said there were a number of factors which could bring the housing market to grinding halt.
He said renting was also becoming the norm for a generation of young people who would have been the new wave of first time buyers.
“There is a lot of uncertainty around and the market hates uncertainty.
“There is a general election next year, we could be at war and there is the possibility of a mansion tax.
“There are a lot of things that we just don’t know about and to talk of 30% house price rises in my view is irresponsible.”
Mr Goundry also balked at the idea of such a hefty rise in the market, but said there was still much to be optimistic about.
“I can see where the argument comes from, but I can’t agree with it and it’s not what my experience tells me.
“I do think there will be an increase.
“The market has been getting better all year, prices have gone up and we may well see a 4% increase by the end of the year.
“I think we could be seeing something like a 20% rise over the next five years. I think that would be realistic and achievable.”
Forecasts concerning the housing market have been of the gloomier variety this week with the Royal Institution of Chartered Surveyors, the Halifax Building Society and the Centre for Economics and Business Research all predicting slow or negative growth.
However property website Rightmove is instead very optimistic about the next five years saying the average prices will soar in England and Wales from £244,192 to £317,967 – a gain of £73,775 or £14,755 a year.
But in an interesting note, they say that for the first time in more than a decade it will be markets outside the capital that will lead the way in price rises.
Rightmove say their forecasting model, used by Oxford Economics, includes factors such as a rising population, a poor supply of new homes, and a recovery in incomes.
Miles Shipside, Rightmove’s director and housing market analyst, said: “Understanding the path of future house price growth is a key element of UK economic strategy and decision making, and our data driven forecasts contain insight not previously available from other commentators or the government’s own forecasts produced by the Office for Budget Responsibility.”
However Anna Brosnan, head of campaigns at the National Housing Federation, said the rises would simply push the dream of home ownership further away for many people.
“These new figures make disturbing but predictable reading.
“Every part of the country, north and south, is feeling the effects of the housing crisis and if we want the situation to improve for the next generation, action needs to be taken now to build more homes at a price people can afford.”