UK house prices will fall by 4.5% this year, according to a leading think tank.
The National Institute of Social and Economic Research says prices will then continue to fall by 1.5% per year until 2015. It claims prices rose during the 2000s because first-time buyers were able to get onto the property market. Mortgages were easier to come by as the deposits required were lower.
The research is backed up by the latest figures from the Land Registry which reveal house prices in England and Wales are on the decline again.
The average property price fell by 1.1% in March to £160,996. This means prices were 2.3% lower than at the same time last year.
Meanwhile figures from the Council of Mortgage Lenders suggest the mortgage market is recovering with the amount lent in March up 21% on February.
Chief economist Bob Pannell says: “The housing market has emerged hesitantly from hibernation. Household finances are under a lot of pressure, and as a result demand for house purchase loans fell in the first three months of 2011. Lenders expect mortgage credit availability to improve this quarter, and this should help to underpin house purchase activity albeit at pretty low levels.”
Five things that can add value to your home
While latest research might show house prices are falling there are some things that can boost the value of your property.
1. Better transport links
A new Tube or train station, which provides easier access to a city centre, could add thousands to the value of your home.
2. Perfect neighbours
Vigilant neighbours not only make for a well-kept street but provide extra security for your home - all factors which add value to your own home when coming to sell.
3. Good results at the local school
According to the Royal Institution of Chartered Surveyors, a school with a good Ofsted report will add 8% to the value of homes that fall within the catchment area.
4. An official accolade
When a city has been given recognition, such as Liverpool's Capital of Culture in 2008, it sees a boost in investment which often translates into inflated house prices.
5. A major sporting event
With East London hosting the Olympics in 2012, surrounding properties witnessed a 15% rise in value before the property crash, according to Halifax.