The report by the Association of Residential Letting Agents (ARLA) and the National Association of Estate Agents (NAEA) predicts that the rise will push the average house price to more than £400,000. By 2025, houses currently worth £280,000 will cost £419,000. London house prices will see the biggest rise.
A decrease in wages, tighter lending criteria and a shortage of affordable housing is also set to lower the percentage of people who own their own home, from 62% to 55%, over the next 10 years. For those already struggling to secure a mortgage lender, the house price prediction is yet another blow.
David Cox, Managing Director of ARLA, says: “Rent costs are already growing at a rate that people are struggling to keep up with, and they’re due to become even less sustainable over the next decade – particularly when the new landlord tax sets in, which will put off many would-be landlords from entering the market. If we’re to see the property market lifted out of its current state, we need to help the rental market from top down as well as bottom up, ensuring landlords are not penalised for their choice of income, and they can in turn give tenants the best possible price and service they deserve.”
ARLA and NAEA recommend ‘a drastic and immediate policy overhaul’, in order to prevent continued house supply shortages and make house prices and rental costs more affordable.
David Cox continues: “Our simple plea before the election was ‘Britain deserves better’. Since the General Election, the government has pledged to solve the acute problems facing the property industry, aiming to build one million new homes before the end of this Parliament in 2020… We are calling for change – and it needs to happen soon.”
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