The average house price will rise by 40% over the next five years to reach £302,400, according to new research published today by social housing pressure group the National Housing Federation. The report also reveals that the average house price in London will increase to almost half a million pounds by 2012. In addition, the paper called Home Truths reveals that a housing market crash is 'unlikely' despite the fact that home ownership will move even further out of the reach of many first time buyers.
According to the report, the average house price is now nearly 11 times average earnings, housing supply has dropped even further behind housing demand, and over 1.6m households (which equates to almost 4m people) are on waiting lists for a social home.
In response to the housing crisis, the Government published a green paper on Monday 23 July, in which it announced welcome plans to build three million homes by 2020 - with up to 70,000 new units per year being social homes for key workers and low-income families. The Federation says its new study reinforces the need for Government to turn its words into deeds - and press ahead with the house-building programme, and release the necessary funds to invest in social housing.
Federation Chief Executive David Orr said: "Our report shows that continuing house price rises and the resulting housing crisis are set to stay with us for a long time. While Gordon Brown's pronouncements on house-building indicate a clear step in the right direction, it is imperative that ministers turn their words into deeds - and deliver on their promises. For those key workers and low-income families looking for a decent home, it is critical that ministers invest sufficiently in social housing. This will enable housing associations, and others, to build the desperately needed 70,000 new social homes a year."
