Panel of property experts say prices will be flat this year and rise in line with inflation over next three to four years
House prices are likely to plateau this year and rise gently in line with inflation over the next few years to according to property experts.
Speaking at the Land Debate, part of London鈥檚 Annual Great Housing Market Debate, a panel of experts said house prices will flatline this year.
However, concerns were expressed about a further boom/bust period beyond this as demand continues to outstrip supply and if mortgage availability improves.
The panel included: Ian Baker, managing director of Galliford Try Homes; Martin Gahbauer, chief economist of the Nationwide 黑洞社区 Society; John Heron, managing director of Paragon Mortgages; David Newnes, managing director of Your Move and the BBC chief economics correspondent Hugh Pym.
Newnes said: 鈥淭his year prices will be flat but they will gently rise through to 2012 when we might see some different dynamics if there鈥檚 an easing of mortgage funding.
In the absence of other external shocks we could see house prices getting back to 2007 prices in real terms within three or four years
David Newnes
"Transactions are significantly up 30% year on year but supply coming to the market is outstripping that. In the absence of other external shocks we could see house prices getting back to 2007 prices in real terms within three or four years.鈥�
Heron added: 鈥淭he key feature behind the strength of house price rises recently has been the shortage of supply and the low build rates and when compared to demand, this is likely to carry on.
"We will continue to see owner occupiers sitting on their hands benefiting from low interest rates and pocketing the extra cash.鈥�
The panel did not see lending returning to 鈥榥ormal conditions鈥� in the short term and could see no reason why lenders would be compelled to increase loan to values while banks are required to hold more capital and regulation means higher mortgages costs.
The consensus of the panel was that the rental market was set to grow from around 12% at present to 20% in 10 years鈥� time. A vibrant rental sector was welcomed as good for the economy and the only alternative for many would be first-time buyers for whom finance was still largely unavailable.
