According to a new report by the Centre for Economics and Business Research (CEBR) house prices across Britain will rise by 25 per cent in the next five years.
The report reveals that the average price of a house in the UK will reach £280,000 by 2018 with prices in the capital, London, reaching £556,000 – a 43.5 per cent rise.
Since Prime Minister David Cameron revealed his intentions at the weekend to bring forward to this week plans to offer 95 per cent mortgages on properties worth up to £600,000, the government has come under fire from many housing experts who believe that the move will almost certainly push prices up by unsustainable levels.
Yet Solomon disagrees. “Government support and an improving economic climate will provide an invigorating shot in the arm for the UK housing market over the coming years,” he said. “This is not a case of houses being built on the sand.
“The housing market recovery we are seeing rests on firm economic and demographic foundations – at least for now. Talk of a house price bubble is premature.”