House prices to increase steadily in 2011
Homeowners with Rented Property Insurance can expect to see the value of their properties increase by around £10,000 in 2011.
The Assetz House Price Watch survey for December showed property values had increased by an average of 1% over 2010.
And house price growth of 5% is now predicted over the next 12 months.
The survey collates the findings of the house price indices from Halifax, Nationwide, Rightmove, CLG House Price Index and LSL Acadametrics.
It found the average UK house price in December was £195,804.
That is below the two-year high of £201,860 reached in July 2010, as prices fell in the second half of the year.
House prices currently remain 9% down on the market peak of £215,089, reached in October 2007.
Assetz chief executive Stuart Law said it appeared the election and comprehensive spending review had hit the market harder than expected – but that the market might now be bottoming out.
“House prices may continue to pull back slightly in the first few months of this year, as they did in the last quarter of 2010, but we still do not expect to see a ‘double dip’ in the market, which would mean prices falling below the recent trough witnessed in March 2009,” Law said.
“The acute housing shortage and rental squeeze remain the key medium-term drivers in the property market’s recovery, underpinning prices for the foreseeable future. As positive forces continue to outweigh the negatives we still forecast house price growth of 5% for 2011.”
Looking at the recent housing market figures as a whole, house price growth is good news for landlords who will see the value of their portfolios increase.
It also makes it more difficult for first-time buyers who are already struggling to enter the market – and should push further rental demand.
However, the economic situation which is driving the housing market remains volatile and landlords are encouraged to shop around for cheap landlords insurance to help them save money.