12 May

House price boom set to continue

House price boom set to continue

The current upbeat property market conditions may continue for at least the next two years, according to new research.

Data from the National Institute of Economic and Social Research (NIESR) concluded the strong house prices could remain until interest rates rise in 2017.

It is expected that prices could rise by 7.8 per cent this year and 4.2 per cent in 2015, with a further 0.6 per cent increase in 2016, although the market could start to stabilise in 2017.

Current interest rates have remained at a record low of 0.5 per cent since March 2009 but it is predicted the Bank of England could vote to increase the base rate in order to control the market.

The NIESR believe even small rate increases could have an impact on households but it is likely that rates will remain low for the foreseeable future.

Jack Meaning, research fellow at NIESR, explained to the Guardian: "It is not necessarily going to take as much of a rate rise as it would have in a period of more normal monetary policy, because we are at a turning point.

"The signal rate rises will send is probably going to have quite a big psychological impact."ADNFCR-1222-ID-801719596-ADNFCR

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