However, as in all recent polls, those house price rises will easily outstrip almost nonexistent consumer price inflation by a considerable margin - rising 5.0 percent this year, 4.3 percent next and 3.9 percent in 2017.

Those expected house price rises will also outpace wage increases, forecast at 3.3 percent next year and 3.7 percent in 2017, according to the latest Reuters poll. [ECILT/GB]

Yet despite all of the debate on the lack of affordable housing in Britain and what to do about it, around two-thirds of property market specialists polled in the last few weeks said the average home was affordable.

"Historically low interest rates mean that for those that can raise a deposit, housing is cheaper to own in most parts of the country relative to disposable income," said Johnny Morris, research director at Countrywide.

The average asking price for a home was 292,572 pounds ($441,520) in November, according to property website Rightmove. In greater London the average price was 619,866 pounds, around 23 times the average British wage.

So it is by no means easy for just about anyone to raise that deposit - usually a minimum of around 10 percent - without outside help or having sold a property that has already gone up in price.

London homes were overwhelmingly rated as expensive, with a median of 9.0 on a scale of one to 10, ranging from very cheap to very expensive. Nationally, house prices were rated 6.5.

That compares with a rating of 5 given by property market analysts on the U.S. housing market, which went through a much more serious correction during the financial crisis. [L1N13P1NA]

"THE UK HOUSING MARKET IS BROKEN"

The Bank of England cut interest rates to a record low 0.5 percent in early 2009, making mortgage borrowing much cheaper.

It is not expected to start raising them until at least April - and even then, any increases will be gradual. [BOE/INT]

Those ultra-low rates have encouraged housing market speculation for many years, particularly in the capital, where wealthy foreigners have also been snapping up property - often in cash. Many Britons have purchased additional properties to let out as a way to generate income and build a nest egg.

In London, for these reasons as well as immigration and where demand has long outstripped supply, prices are set to rise 5.0 percent in 2016 and 4.0 percent in 2017. All 19 analysts who answered the question therefore said homes were unaffordable or very unaffordable.

"Even with record low rates it has never been more expensive," said Countrywide's Morris.

To meet demand, Britain needs to build around 200,000 new homes a year and its failure to construct much more than half that has caused prices to rocket, Andy Haldane, the BoE's chief economist said last month.

"The UK housing market is broken," said Haldane. "There is a chronic and accumulated imbalance between demand and supply, and it is that which is sending skyward – and has sent skyward – house prices."

Fourteen of 20 analysts in the poll - even though a majority still say the national market isn't unaffordable - said they agreed with Haldane on this fundamental imbalance.

"There is now unfortunately a vicious circle of undersupply and in-built cyclicality risk being built into a housebuilding market virtually completely reliant on the private sector," said Mark Farmer at Arcadis, a consultancy.

"The business models employed by housebuilders will never inject more supply into the market if it negatively impacts prices."

Shares in British housebuilders such as Taylor Wimpey and Persimmon have had a year of sharp growth as the demand-supply imbalance has helped them reach higher values.

The Thomson Reuters UK Homebuilding Index has risen around 30 percent since the start of 2015, outperforming a 3 percent fall on the blue-chip FTSE 100 index over the same period.

(Polling by Hari Kishan and Aara Ramesh; Editing by Raissa Kasolowsky)

uk.reuters.com