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Average London house 'to cost 500,000 by 2020': Welcomed by home owners but 'grim news' for first-time buyers
Economic growth is expected to be stronger in the capitalThere is evidence of a growing 'North-South' divide in the housing market outside London
01:34 GMT, 11 February 2013
01:36 GMT, 11 February 2013
The price of a typical London home will hit half a million pounds by the end of the decade, according to leading economists.
The average house in the capital will cost 383,000 this year and then rise more than 30 per cent by 2020, the Centre for Economics and Business Research think-tank said.
Experts last night said the figures would be welcomed by home owners in the capital but said it was ‘grim news’ for those already struggling to get a foot on the property ladder.
Price is up: The price of a typical London home will hit half a million pounds by the end of the decade, according to leading economists
The future is also looking bleak for property owners in the North East and the Midlands, with evidence of a growing ‘North-South’ divide in the housing market outside London.
Economic growth is expected to be stronger in the capital than the rest of the country, which will help fuel a rise in house prices of 24.8 per cent in the South East and 25.7 per cent in the East of England between 2013 and 2018.
'Grim news': David Hollingworth said it was tough for first-time buyers already facing 'an uphill struggle with a constrained mortgage market'
However, prices in the North East and
Northern Ireland are forecast to grow by just 2.3 per cent and 6 per
cent over the same period.
Official figures show the average cost of a home in the North East is just under 100,000, compared with 372,000 in London.
Daniel Solomon, CEBR economist and author of the report, said: ‘Before the decade is out we predict the price of the average home in London will reach 500,000. House prices will be driven by London’s comparatively rosy economic growth prospects, buoyed by IT, business and professional services.’
He added: ‘Nevertheless, house price growth in London will remain notably slower than in the boom years before the financial crisis.’
The gulf in property wealth between families living in the South and those in the North was highlighted in a recent report by Halifax.
It found that properties in the South are currently worth a total of 2,000billion, compared with a total of 1,670billion in every other English region combined.
Responding to the latest predictions from the CEBR, David Hollingworth, from mortgage broker London & Country, said: ‘Those who already have property in London and the South East will welcome these figures but they represent grim news for first-time buyers already facing an uphill struggle with a constrained mortgage market.’
75,000 FOR A GARAGE THAT BECAME A HOME
There was a time when 74,950 could buy you a decent-sized house. How distant those days seem now!
For that is the asking price for this tiny one-bedroom home which used to be someone’s garage.
Just 13ft wide, it looks like a glorified Wendy House yet boasts an open-plan kitchen, dining and living area, bathroom, upstairs double bedroom, and a courtyard garden at the back.
The house in Bridgwater, Somerset, has only just come on the market but has already attracted a fair amount of interest, according to estate agents.
Mark Franklin of Tamlyns said: ‘We had someone come all the way down from Surrey to see it.
‘It’s very unusual. I’ve never dealt with anything quite like it before.
‘There’ll be somebody out there it would suit – perhaps a single person.’
Diminutive: Real estate agents said the converted garage, which boasts an open-plan kitchen, dining and living area, bathroom, upstairs double bedroom, and a courtyard garden would suit a singleton