It cited a 'chronic lack' of properties for sale, mirroring analysis from Rightmove released yesterday that a 'mismatch between demand and supply' caused house prices to reach a new record high.
Rightmove's figures show that supply fell 10.6%, bringing the average new seller asking price to £294,542.
CEBR predicts that by 2020, average house prices will increase from £261,000 to £321,000 – a 23.1% rise. However it expects inflation to drop slightly to 3.4% in 2016 and 4.4 % in 2017.
Nina Skero, CEBR economist, said:
“With the possibility of higher taxation on prime property and intervention in the rental market less likely, the Conservative party’s victory in the general election will likely support stronger price growth in the second half of 2015. Prices will also see a boost from the lack of fresh properties coming on the market."
Stephen Smith, Director, Legal & General Mortgage Club & Housing, commented:
"This imbalance will inevitably push up house prices until housebuilding is ramped up to accommodate excess demand. This trend has been picked up by the Cebr’s revised house price forecasts, showing the scale of the issue if nothing is done to address the widening rift between supply and demand. This may be seen as good news for existing homeowners, who will see the value of their property climb, but it is making it increasingly difficult for first-time buyers to reach the first rung of the property ladder.”
