Earlier reports have been less than optimistic concerning future house prices in the UK.  However, the Quarterly Housing Prospects report revealed that house prices are expected to not only match but exceed pre-crisis levels next year.  The report from CEBR, the economic forecaster, expects the average house price will reach £219,000 this year and £223,000 in 2014.

Should the average house price actually reach £219,000 this year it will be a 0.8% increase over the figures from 2012.  The report suggests that the average house price in 2018 will reach £261,000, which will be a 19.1% increase. 

Daniel Solomon, CEBR economist, said, “UK property prices will be driven to pass their pre-crisis peak for the first time by fundamentals such as a return to modest economic growth and restricted housing supply increases.”

The expectations for the Bank of England are for the policy makers of the Monetary Policy Committee to increase the quantitative easing (QE) programme in the later part of the year to support mortgage lending and help to increase house prices. 

The Funding for Lending Scheme is seen to be having a positive impact on the housing market with mortgage lending increasing to borrowers keen to climb onto the property ladder.  Lenders reported in a survey held for the Bank of England that they expect to increase their mortgage lending levels in the first quarter of the year.  The inclement weather is expected to slow down demand from home buyers and remortgaging homeowners but once there is a break in the cold demand should be evident according to experts.