An economic forecaster has predicted that average UK house prices will jump by nearly £60,000 over the next five years. If this comes to pass, prices could be at more than £320,000 in 2020.
The Centre for Economics and Business Research (Cebr) observed that the property ladder’s rungs are also moving further apart, making it more difficult for people to trade up to a larger house due to rising prices.
According to the forecaster, in 2015 property prices are expected to be 5.6% higher compared to average values across 2014, and the average property price in the UK will reach an all-time high of £263,000 this year.
Property prices are expected to continue their upward progression in the coming years. Prices are predicted to be 3.5% higher in 2016, with more annual increases of approximately 4% in the ensuing four years.
These increases will cause the average UK property price to reach £321,600 in 2020 , which is £58,600 more than the current average house price.
Cebr had predicted earlier that property values would go up by 4.7% annually in 2015, but recently revised the increase to 5.6% in light of the fact that fewer properties are being placed on the market, causing supply to dry up and driving prices upward.
It also claims that the price gaps between different types of properties are getting wider, which makes it hard for people to proceed up the property ladder.
In London, anyone who wants to move from a flat to a terraced home now needs an extra 176,000 to fund the move.
Compared with 2000, when the cost of stepping up between these property types was only £46,000, prices have practically quadrupled.
Cebr economist Nina Skero, primary author of the report, said that a reduction in the number of available properties has placed more upward pressure on property prices in certain parts of the country. It is a cumulative result of low housebuilding levels, an ageing population, and the growing cost of climbing the property ladder.