House prices set to soar by 20% in the next five years with average home costing almost £200,000
Savills, the upmarket estate agency, said it has upgraded its housing market forecast from a rise of 11.5 per cent by 2017 to a jump of 18.1 per cent.
The research said ‘government intervention’ partly triggered the upgrade while critics warned the interventions are fuelling a house price boom but doing nothing to help lending to businesses.
Yesterday the Council of Mortgage Lenders said gross mortgage lending rocketed to £15billion in June, a massive increase of 26 per cent on the same month last year.
It is the highest monthly total since October 2008, the month that taxpayers were forced to bail out both Royal Bank of Scotland and Lloyds Banking Group as the crisis struck.
Millions of homeowners have never enjoyed cheaper mortgage deals, while the number of first-time buyers is rising sharply helping by loans which demand only a small deposit.
Savills predicts the average home, worth around £162,000 at the beginning of the year, will be worth £191,631 by the end of 2017, a rise of nearly £30,000 or 18.1 per cent.
While mortgage lending is rising, lending to businesses continues to fall.
Yesterday the Business Secretary Vince Cable said estimates show net lending by UK banks to small and medium-sized firms has been negative for 22 of 24 months to May.
Separate figures, from the Bank of England, also published yesterday, show lending to all businesses contracted by around £4.5billion between March and May.