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House prices in South West 'to rise by a third by 2016'

By Western Morning News  |  Posted: June 26, 2012

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House prices in the South West are tipped to rise by 36% over the next four years, according to new figures from industry experts.

The predicted increase is 2% more than for the whole of the UK.

While the South West will see the fastest increase over the period, Wales will be the slowest with just a 15% swing.

However, housing experts in the South West urge caution over the forecast while insisting prices are likely to remain stable over the next few years.

The numbers come from BNP Paribas Real Estate (BNPPRE) in its latest Housing And The Economy report.

Pages of the document contain the company's quarterly housing forecasts pulled together by Professor Patrick Minford, a former economics adviser to Prime Minister Margaret Thatcher.

According to the figures, the South West has been among the strongest performing UK regions in terms of price growth over the five years to 2011, although this still meant a fairly muted performance of only 0.1% growth per annum. This year price growth is expected to be 1.81% with a bigger jump to over 6% in 2013 reaching the accumulative figure of 36% by the end of 2016.

In comparison the UK is expected to have cumulative growth of 34% by the end of 2016 with an annualised growth rate of 6% per annum.

Growth in 2012 is expected at 2.11% following last year's marginal fall of -0.21%.

Peter White, head of agency in BNPPRE's Bristol office, said that he expected the South West to perform strongly over the next five years, making it the fourth highest region in the UK in terms of house price growth.

He said there had been a sharp "bounce back" in the stronger markets such as Cornwall and along the M4 corridor.

Mr White said: "We believe we will see more activity from major foreign contractors with new house building models in the market.

"However, this positive outlook is tempered by affordability with local families and young people increasingly unable to buy where the average rural home is around thirteen times the average local income."

Housing experts in the South West described the figures as "misleading", adding that prices were currently stable and likely to remain so.

Richard Copus, spokesman for the National Association of Estate Agents in Devon, said that while he agreed with some of the figures quoted he did not believe the predicted increase was accurate for the South West.

He said: "If they have based their figures largely on major foreign contractors then figures for the South West are misleading.

"While foreign companies invest in London and other major cities they don't in our area – benefits to our area will be fractional.

"What we can say is house prices are stable – which is good – and are likely to remain so for the foreseeable future."

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  • josdave  |  June 26 2012, 1:11PM

    That'll cheer up the estate agents and the solicitors the only ones who gain by the ridiculous overpricing of houses.

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  • Leaklocate  |  June 26 2012, 12:04PM

    I have been monitoring house prices in various areas in the South West, as I am planning to move there in the near future( and to open up a business there) and in my experience i have seen if a property is 'on the market' for longer than 6 weeks - then 'selling value drops by 7 percent' and there has been Q a lot of these in the area- so the 'Old' rule of supply and demand WILL dictate the actual prices and the South West is currently in 'over supply' mode With the coupling of socio economic profile/influx of 'Dole' users into area- am i afraid that i just do not see how these type of increases could be viable/achievable( Apologies if Grammar is not up to standard- as English not my first language)

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  • Big_Ger  |  June 26 2012, 11:21AM

    I have to agree, whoever thinks they will rise by a third is dreaming! If they remain stable for the next four years that will be a good thing.

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  • Stork  |  June 26 2012, 11:20AM

    More hype. The things these companies do, to try and get more people into debt. Ignore them. As far as domestic property goes, we're not out of the financial woods yet. My daughter has just bought a house in the South West, in a nice town, asked, and got, a 25% reduction in the purchase price because she had no property to sell, had a good deposit, and a mortgage available.

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  • alangoudge  |  June 26 2012, 10:53AM

    Where do they get these projective figures from? With the current climate and no significant pay rises how on earth do they think people can pay these prices. Surely it is customer based and the price rises of houses should be minimal!!!

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