In 5 years time, house pries will break the £300,000 barrier

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by Kay Murchie

According to research published by the National Housing Federation, the average house price in England will rise by 40% in 5 years top £300,000. This will result in more parents having to pay their children’s mortgages bringing more anguish for first-time buyers.

Home Truths, researched by Oxford Economics, explained the current housing market as “distorted and dysfunctional”. The average house price is nearly 11 times the average wage and more than 4 million people are on waiting lists for social housing.

The independently owned group, which provides quantitative analysis and public policy advice, argues in the report that the rise in buy-to-let and second homes is without question contributing to the overvaluation of property.

Areas affected by soaring projections are the south-east, where the currently and the east, where the average house price will be £340,200, compared with £211,880 today.

According to the report, there are only 7 areas in England where the cheapest homes cost less than 4 times the average wage - Barrow, Burnley, Hartlepool, Hull, Pendle, Stoke-on-Trent and Wansbeck. The report indicates that in London, the average house price will be £478,300 compared with £318,864 today.

The report suggests that the government increases its investment in preventing homelessness and supporting the continued restoration of England’s most deprived housing markets by investing £400m a year in low-demand areas.