Some homeowners who bought during the peak of the market in 2007 are likely to experience continued negative equity throughout all or most of the period covered by the research.
According to independent economists Oxford Economics, who produced the figures for the Federation:
* House prices in England in 2013 will be 3% below their pre-credit crunch peak of 2007, but by 2014 they will be 3% higher;
* An average price property in London purchased in 2008 for £331,500 will drop to £268,600 in 2010, before rising to £354,900 by 2014;
* The average East Midlands home will be worth less in 2014 at £165,300 than it was in 2007 at £172,500.
The new research published by the Federation, which represents England’s housing associations, shows how the Recession has increased housing need:
* While demand is growing, supply of new housing is falling – with only around 60% of the new homes required being built each year;
* The failure of the nationalised banks to lend is preventing affordability from improving for first-time buyers and those who want to buy shared ownership properties – even as some house prices fall;
* More than 250,000 households are expected to form each year until 2026, adding further to housing demand;
* Five million people could be on housing waiting lists by 2010. The 2008 waiting lists were 40% higher than in 2003 and comprised of 1.77m households.
According to Oxford Economics, the average house price in the English regions in 2014 will be:
* North East – £155,700 (compared to £148,100 in 2007)
* North West – £159,300 (£162,000 in 2007)
* Yorkshire & Humberside – £175,600 (£163,600 in 2007)
* East Midlands – £165,300 (£172,500 in 2007)
* West Midlands – £180,500 (£178,400 in 2007)
* East of England – £235,400 (£231,100 in 2007)
* London – £354,900 (£329,200 in 2007)
* South East – £293,600 (£267,000 in 2007)
* South West – £225,400 (£224,500 in 2007).
Federation chief executive David Orr said: "Our new 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.
"Even though house prices are falling, and are set to remain sluggish in some areas for the foreseeable future, affordability is not improving for many low-to-middle income households.
"For millions of people who want a home, getting a mortgage can be like winning the lottery. First-time buyers and those wanting to buy shared ownership properties remain victims of a deep freeze in mortgage lending.
"Until lending is freed up, young and lower income households without access to large deposits will be locked out of the market."
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