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Average house prices won’t recover peak until 2020

Tuesday, 12 July 2011 3:17 PM

Average housing prices are unlikely to climb to their previous peak levels until 2020, according to new research out today.

PriceWaterhouseCooper’s latest UK Economic Outlook report claims that its analysis points to only a 12 per cent chance that real house prices will have risen back above their 2007 peak by 2015.

The median projection, the report said, would be for a 12 per cent real decline over this period.

Even by 2020, PwC said, there is only just over a 50 per cent chance of a real house price rise relative to 2007.

John Hawksworth, chief economist at PwC, said: “We expect average UK house prices to drift down further over the next year and then enjoy only a modest recovery over the next few years.

“This reflects the dampening impact of declining real income levels and continued tight credit conditions for first time buyers in particular.

“Later in the decade, however, we do expect stronger house price growth as supply shortages reassert themselves and credit availability gradually returns to more normal levels. But it will be a long slow road to recovery.”

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