April 7 (Bloomberg) -- House prices in the U.K. will rise to levels in late 2007 before the country’s economy sank into a recession, the Centre for Economics and Business Research said.
Shortage of housing relative to demand, improved affordability and mortgage availability will probably support house prices in the U.K., the London-based research group said in a report today. It sees unemployment as a negative factor.
“House prices have been pretty stable over the past two years,” said Shehan Mohamed, an author of the report. “Lending for housing was 74.5 billion pounds ($118 billion) in 2011 and we forecast that this will rise to 109.9 billion pounds by 2016.”
It forecast house prices will rise 0.8 percent this year, compared with a contraction of 1.3 percent in 2011. That’s a downward revision from 1.6 percent growth projected in November.
CEBR expects prices of residential properties will increase 2.2 percent next year, 2.6 percent in 2014, 2.8 percent in 2015 and 3.8 percent in 2016.
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