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UK house prices will fall in real terms over the next five years, an influential group of economists has warned.

The National Institute of Economic and Social Research (NIESR) believes prices will fall, in real terms, by about 8% due to inflation rising faster than property values.

As a result, when inflation is accounted, for "real" house prices will have dropped to 2003 levels by 2015.

NIESR’s figures show average house prices will rise from £194,235 last year to £213,091 in 2015.

But to keep pace with inflation they would need reach £231,000.

The resulting "real" shortfall will leave average households £28,000 out of pocket.

NIESR research fellow Simon Kirby said: "While we have assumed the housing market remains stable, house prices could decline at a more rapid pace."

In a further economic blow, NIESR also warned a double-dip recession was more likely after the Coalition’s Emergency Budget.

Kirby said: "The Budget will inevitably reduce growth. The major impact will be in 2011, when we believe it will shave 0.4 percentage points off GDP."

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"The resulting "real" shortfall will leave average households £28,000 out of pocket." - What?? How would your house value going up (albeit by less than inflation) leave you "out of pocket"? What a stupid statement.

Bob , July 30, 2010

Real House Prices

Depending what you read it would seem anything could happen with UK house prices over the next 5-10 years! The bottom line is very different though. Not everyone bought at the peak, many (if they sold right now, or even in a few years time) would still be in profit. http://www.ipinglobal.com/ipin...use-prices

IPIN Live , July 30, 2010 | url

QUANGOES DON'T LIKE TORIES

As most quangoes come to life during Labour administrations, and then lose funding or are shut down during the ensuing Conservative financial rebuilding proces, you would hardly expect them to applaud the cost-cutting now being driven by Cameron, and essential after 13 years of Labour mismanagement.

I think we can therefore disregard the doom-mongering of this and all other similar bodies, who simply want to stir up disenchantment with Conservative policy and hasten the resurgence of their socialist chums and benefactors.

Major Landlord , August 02, 2010