Pantheon Economics: House prices to rise by 4% this year
House prices are expected to rise by 4% this year, as the housing market continues to recover, according to Pantheon Economics.
Research consultancy Pantheon Economics revised up its price growth expectations in 2020 from 2.5% to 4%, though its forecast for 2021 remained at 3%.
Pantheon said the primary driver of the recovery has been falling mortgage rates, as interest rates for 5-year fixes fell by 0.32% during 2019.
It also noted that RICS’ Residential Market Survey suggests the outcome of the election has “turbocharged the recovery that was already underway.”
If house prices pick up the report said households spending will follow and the MPC will stop flirting with cutting rates.
Pantheon added that the restrictions on mortgage lending imposed by the Financial Policy Committee in 2014 still are not close to biting.
The most restrictive rule requires lenders to limit the proportion of mortgages with loan-to-income ratios exceeding 4.5 to just 15% of their overall new lending.
However, loans above this threshold currently account for just 9% of all new loans, no higher than in 2014.
Kindly shared by Property Wire