House price inflation could hit ten per cent this summer, economists have predicted. It would mean buyers having to pay about £22,000 more on average than a year ago. Experts said even though this year's surprise boom was 'unsustainable' in the long term, prices were forecast to continue going up for the rest of the year - and to rise again in 2022 and 2023.
Robert Gardener, chief economist at Nationwide Building Society, said house price inflation was likely to move into double digits in the next couple of months, following a dip in values during the early months of the pandemic. He warned that the longer-term- outlook was difficult to predict. 'It will be a question of how resilient the labour market is,' he said. 'Will unemployment spike? If so, that could impact adversely on the housing market, slowing activity sharply. Or will any increase in unemployment be limited by a steep recovery in the economy? If so, that will augur well for house prices.'
Andrew Wishart, property economist at forecasters Capital Economics, predicted house price inflation would average three percent a year between now and the end of 2024, as long as interest rates remain low. He said: 'Without increases to interest rates, which are unlikely until 2025 at the earliest, we see no reason why the market should correct.'