House dip to last two more years

THE HOUSE price slump will continue apace this year and next, according to a starkly bearish annual forecast from the National Housing Federation (NHF) released today. <br /><br />In a gloomy report the group has warned of a sharp 12.2 per cent fall in total in England during this year, and a further 4.6 per cent fall next year, ahead of stabilisation in 2011 in the form of a meagre 1.1 per cent rise.<br /><br />The group said house prices will be 20 per cent higher than now in 2014, meaning homeowners and stricken buy-to-let investors face a gruelling five-year wait before the damage done by the collapse of the property bubble is repaired. <br /><br />The downbeat report pours cold water on the latest Nationwide Building Society report, which last week suggested prices across the UK could register an overall rise this year.<br /><br />But, the NHF also said the stabilisation seen in 2011 would be followed by a bumper 7.5 per cent price rise the following year, and then a stellar 8.4 per cent rise in 2013 and a 6.4 per cent gain in 2014. <br /><br />NHF chief executive David Orr said: &ldquo;Our research shows that, while house prices are falling in the short term, they will inevitably increase in the long term because of a fundamental under-supply of housing.&rdquo; <br /><br />He added that only 60 per cent of the required level of new homes is currently being built, guaranteeing eventual price rises.