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Housing recovery at least a decade away

Housing recovery at least a decade away

Category: Mortgages

Updated: 16/07/2012
First Published: 12/07/2012

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

House prices are not expected to recover fully for at least another decade; sour news to homeowners who are intending to sell their home in the near future.

Average house prices have shown some encouraging signs lately; however, a combination of the ongoing eurozone crisis and economic uncertainty means that the market is predicted to remain subdued until at least 2020.

Despite being labelled a 'buyer's market', low demand from prospective buyers is also believed to be a factor in this prediction.

PricewaterhouseCoopers (PwC) who compiled the report, said that property prices have fallen on average by 18% since the financial crisis occurred in 2007. Growth in the housing market is expected to be slow.

John Hawksworth, chief economist at PwC, said: "Recovery in the UK has stalled over the past year as the eurozone crisis has taken its toll. However, while official data suggests that the economy fell back into a technical recession in the first quarter of 2012, labour market and business survey data suggest continued modest growth.

"A positive development has been lower inflation, which we expect to fall back towards its 2% target rate over the next year unless there is a significant resurgence in global commodity prices. This will boost real consumer spending power, which was severely squeezed in 2011 as prices rose much faster than earnings.

"The outlook for the UK as a whole remains cloudy but with scope for improvement – with GDP broadly flat in 2012 but picking up in 2013."

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