The figure comes from a poll of 22 economists by Reuters. The poll of economists’ thoughts on the housing market is a regular feature on Reuters’ wire services, although rarely includes a precise forecast.
The interesting conclusion is that despite Help To Buy and the ‘mood music’ of wider UK economic recovery only being in effect for part of 2013, Reuters’ economists anticipate that house prices will have risen 6.5 per cent by the end of this year. That's less than the rise forecast for the entire 12 months to follow.
This contrasts with most of the estate agents who have so far predicted 2014 increases to be significantly larger than those seen this year. A further contrast is that while, perhaps inevitably, the estate agents’ research teams argue against the prospect of a house price bubble, the economists polled are less certain.
Eight of the 22 say they are ‘not very confident’ in the Bank of England's ability to cool a strong housing market while three go further and claim they are ‘not at all confident.’ On the other hand, nine say they are ‘fairly confident’ and one ‘very confident’.
The economists are also split on whether the £600,000 Help To Buy cap is simply too high.
"Property prices are high relative to incomes across all regions in the UK and are being inflated further. Lowering the ceiling would only help at the margin" says one of the 22, Philip Lachowycz of Fathom Financial Consulting.
A final thought on the relatively small number of economists polled. Although 22 is a modest total, it is certainly more than the number of researchers employed by most leading estate agents to produce their forecasts...
This blog will continue to carry 2014 housing market forecasts by leading organisations as they are issued. To see earlier forecasts, click on November 2013 in the ‘Archive’ section - then scroll down to get all 10 so far.
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