The limited supply of homes means average property prices will rise 3.5 per cent next year and a further 4.2 per cent in 2017.
The forecast - from the Centre for Economics and Business Research - is accompanied by suggestions of market incentives that could encourage people to move to smaller ‘right-sized’ homes and to persuade older owner-occupiers to move and so increase stock coming to the open market.
CEBR says historically one of the chief reasons for homes coming to the market was because younger owners ‘moved up’ but the price difference between a terraced house and a purpose-built flat - a typical younger person's property move - has boomed in some regions, notably London.
CEBR says in 2000 this price difference stood at £46,000, but has nearly quadrupled to £176,000 now.
"A reduction in the number of properties being put on the market has placed further upward pressure on house prices in some parts of the UK. This is a result of low levels of housebuilding, but also other factors such as an ageing population and the rising cost of moving up the property ladder” says CEBR researcher Nina Skero.
"The price gap between a first-time home and a larger family home has skyrocketed in some regions, such as London, curbing activity in the housing market. For many, the rungs of the property ladder are moving further apart, making it impossible to upsize” she says.
Article courtesy of Estate Agent Today | Sign up for Estate Agent Today newsletter | Get this news on YOUR site!