House prices rising faster than income?
According to the Centre of Economics and Business Research the affect of the shortage of homes available will cause house prices to rise faster than income this year.
The CEBR see house prices this year rising by 4.7%, that is in contrast to the figures given out in March when they set the forecast at 1.5%. This upward revision in outlook was due to the severe shortage of properties coming for sale over recent months, however only last week we saw a report mentioning that there was an increase across the country in properties coming to market, this was reported in a recent “Breaking News” item.
Salaries are currently only rising at an annual rate of 3.2 per cent, according to the Office for National Statistics, the CEBR expects that any interest rate rises by the Bank of England will have little affect on reducing demand for property, saying they will only climb up to a “new normal” of 2%