HOUSE PRICES TO RISE 27% IN NEXT 5 YEARS

A shortage of properties and a better economic climate will propel values even higher than their peak 2007 levels, housing economists at Savills estate agency predicted yesterday.

Although prices may dip slightly next year as the supply of houses temporarily increases, afterwards home owners can look forward to significant year-on-year rises. Values are predicted to increase 5.4 per cent in 2011, followed by 8.9 per cent in 2012, 7.2 per cent in 2013 and 6.1 per cent in 2014 and 2015.

The average house would then cost £197,917 – 7.5 per cent above the peak of mid-2007.

In some locations prices are already soaring.

House builder Octagon reports a rush for properties, with a £5.6million home in Radlett, Herts, setting a record for the town.