House prices in North East to soar by 2014

Aug 4 2009 by Joanne Butcher, The Journal

HOUSE prices in the North East will increase by 17% by 2014, according to a new forecast. The National Housing Federation predicts the average house price in the region will rise to £155,700 by then, helping end recession misery for many.

It is good news for some of the homeowners plunged into negative equity by the credit crunch.

The research was conducted by independent economists Oxford Economics for the Federation, which represents housing associations in England.

It predicts house prices in the North East will fall by 7.7% this year and fall a further 3.7% next year before stabilising.

But in 2011, it expects a 0.7% rise, with increases year-on-year up to 2014.

Figures also indicate that while demand is growing, supply of new housing is falling, with only around 60% of the homes required being built each year. This will further push up prices.

In the years from 2004 to 2014, house prices in the region will have increased by almost 30%, from £121,300 to £155,700. However, those who bought at the peak of the market in 2007 are likely to experience continued negative equity, with the region’s predicted increase lagging behind the average rise of 20% to £227,800 in 2014 for the country as a whole.