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Prediction of large increase in house prices

The accountancy corporation PwC has estimated that British house prices are due to rise by over a third before the decade comes to a close.

In a report on the future of the economy, PwC stated:

“The UK housing market has leapt back into life. Prices across all regions are accelerating in stark contrast to the generally weak picture (at least outside London) seen until 12-18 months ago.”

The firm has pencilled in a rise in average house prices of approximately eight per cent for 2014. However, PwC has underlined that there will continue to be significant regional differences in the UK housing market. PwC has suggested that London prices may have increased by over 12 per cent by the end of the year.

If the forecasts of PwC are roughly accurate, owners of houses should become even keener to invest in improving the quality of their properties. This should have implications for the demand for wood flooring in Cheshire and other UK cities.

Will Zimmern is an economist who works for PwC. He has said he does not believe that the entire UK is at risk of being affected by a bubble in housing. However, Zimmern has expressed a greater degree of concern about the prospects of the capital seeing a bubble develop.

Nevertheless, Zimmern has argued that monitoring of the London housing market should enable decisions to be made that could stop a bubble forming. For instance, an earlier than expected rise in interest rates would have an influence on behaviour in the market.

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