House price growth to slow after 2016

9th May 2014

The National Institute of Economic and Social Research (NIESR) has predicted that the boom in house prices will continue for at least two years before interest rate rises bring the process to a halt in 2017.

Prices will rise by 7.8% this year and 4.2% next year, but drop to a 0.9% increase in 2016. That will be followed by virtually no increase in house prices in either 2017 or 2018 as households and lenders respond to higher interest rates. NIESR warned that even a small rise in borrowing costs will have an impact on households, although the think-tank expects rates to remain below pre-crisis levels for at least another decade.

Source:   The Times (09/05/14)