The level of growth in the property market remains strong, with growth rates climbing fastest in London according to forecasts from the EY Item Club.
- Average house price will grow by 8.4% this year and 7.3% in 2015
- Warning of property bubble in London as average prices expected to reach £600,000 by 2018
- Rising house prices mirror climbing rents
Forecasts published earlier this week by the EY Item Club show that average UK house prices will grow by 8.4% this year and 7.3% in 2015, continuing the increases in the cost of property seen in recent months.
High rates of growth mean that the average house price in London is expected to stand at almost £600,000 by 2018, more than 3.5 times the average price in Northern Ireland and 3.3 times the average in the North East.
Outside of London and the South East, the South West and East of England boast highest predicted growth rates, with 6.2% growth expected between 2013 and 2018.
At the opposite end of the scale, the North East is expected to have the lowest level of price growth (4.2%), followed by Scotland (4.5%) and the West Midlands (4.6%).
With prices in the capital expected to grow at a rapid rate, Andre Goodwin, Senior Economic Advisor to the EY Item Club, warned that London’s property market is starting to show symptoms of ‘bubble-like conditions’.
He noted that with strong demand and a lack of supply, London is “increasingly giving us cause for concern”.
However, he added: “House prices across most of the country remain well below their pre-crisis peaks and there seems little danger of a bubble developing.”
Rising house prices mirror the increasingly popular rental property market, where rents are climbing steadily and providing excellent returns for landlords.