Property prices set to soar

THE East Midlands is set to see the steepest increase in private sector rents of any English region over the next five years, the National Housing Federation are warning.

The Federation fears that, with house building down to its lowest level since the 1920s, the shortage of housing will have huge implications for house prices and private rents across the country.

According to Oxford Economics - who were independently commissioned to produce the forecasts - the average house price in the East Midlands will rise from £153,200 in 2011 to £182,600 in 2016.

Those in the private rented sector in the East Midlands are also expected to feel the pinch over the next five years, with rents expected to soar by 25 per cent.

The increase will mean rents would increase on average in the East Midlands from £361 a month in 2011 to £451 a month in 2016, meaning tenants would be paying £1,080 more a year in total.

Jon Longden, The Federation’s East Midlands Manager, said: “The steady increase in house prices across the East Midlands is making home ownership more of a dream than a reality for thousands of households on lower, and even average incomes.

“With further rises over the next five years the situation’s going to get untenable, meaning home ownership will start to become the preserve of the wealthy.

“A chronic shortage of new homes is at the heart of the issue. The fact that house-building has dipped to its lowest level in 90 years means we’re facing a major crisis.

The National Housing Federation is now calling for more government investment in affordable housing to stimulate a wider, faster economic recovery.