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Last Updated: Monday, 17 July 2006, 11:51 GMT 12:51 UK
Home prices 'to rise 50% by 2011'
Front door keys
Affordability will remain a major headache for first-time buyers
Average house prices in England could rise from 195,000 to nearly 290,000 by 2011, research from Oxford Economic Forecasting (OEF) has said.

Under-supply of new housing will fuel house price inflation, the OEF added.

Getting on the housing ladder will become even harder, it said, as house prices rise from eight times average salaries to 9.2 times in 2011.

David Orr, chief executive of the National Housing Federation, said there was a "crisis" of affordability.

"High house prices are already having a disastrous effect on local communities. People are unable to find a home in the area they grew up," Mr Orr said.

"Over the next five years we'll see home ownership being pushed further out of the reach of middle earners and even those on relatively high incomes," he added.

The Federation, which sponsored the OEF report, added that about 80,000 extra new homes needed to be built each year to boost supply and avert a dramatic rise in house prices.

However, the OEF's prediction goes against many other housing market forecasts.

The Halifax and Nationwide have both said that house price growth will be modest over the medium term, while research group Capital Economics has said that it expects prices to fall later in 2006.




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