English home prices 'set to rise'

Various predictions have been made about house prices

Average house prices in England are set to rise by 25% by 2013, a National Housing Federation report claims.

It sees prices falling 4.4% in 2008, 2.1% lower in 2009, recovering by 2010 and rising at over 9% in 2012 and 2013.

People living for longer, delaying marriage and getting divorced more were all adding to demand for homes.

While there are questions over how accurate five-year forecasts can be, there is a general concern that new homes being built will not meet demand.

"As soon as the economic outlook improves, house prices will resume their previous upward trajectory," said the Federation's chief executive David Orr.

Price trends

However, a number of analysts have been suggesting that house prices will fall by at least 7% in 2008 since the start of the year.

Others have been suggesting bigger drops in prices over the year.

David Orr of the National Housing Federation explains his projections

The Federation, which represents housing associations in England, predicts that rising demand and falling supply will push the cost of the average home in England to £274,700 in 2013.

"People are living longer, they're delaying getting married and they're more likely to get divorced - meaning that we now have more households than ever," said Mr Orr.

He said only 75% of the new homes needed were being built each year, which was also hitting the availability of affordable homes.

Others have been suggesting bigger drops in prices over the year.