The economists at the Centre for Economics and Business Research predict that property prices will be only 2.2% higher next year, because of rising unemployment. But low interest rates and the shortage of housing means that the market will probably see house prices rise by 16% over the next three years.
Douglas McWilliams of CEBR said, “House prices may not move much during 2011, but they are likely to rise significantly in the following three years”. The group further predicts a 4% rise in 2012, a 5.4% rise in 2013, and another 4% rise in 2014.
Other economists have widely different predictions: IHS Global Insight expect house prices to have fallen by 10% by the end of next year, and Capital Economics expect a 20% fall before the end of 2012.