Wednesday, Apr 22, 2015Wednesday, Apr 22, 2015

Home prices in Britain to rise 7% this year as London leaps

Published on Feb 25, 2014 9:35 PM

LONDON (REUTERS) - British house prices are expected to surge this year as a supply shortage and strong demand from overseas investors drive up the already-high prices of the London property market, a Reuters poll showed.

With the economy on the road to recovery and interest rates at rock bottom, home prices are climbing again. The poll of 27 economists and analysts, taken in the past week, suggested they will rise another 7.0 per cent this year.

"There will be more buyers, and at this stage the supply has not increased. There will be a lot of people thinking, 'I will lock in my mortgage now'," said London-based independent property market analyst Tony Williams.

The Bank of England slashed interest rates to a record low 0.5 per cent nearly five years ago, making borrowing cheap for those who can get a mortgage. It is expected to gradually raise the bank rate starting next year.

Enjoy 2 weeks of unlimited digital access to The Straits Times. Get your free access now!