According to the National Housing Federation’s (NHF) Home Truths 2008 report, the average house price in England will rise by more than 23% by the end of 2013.

In the short-term, the NHF forecasts that house prices will fall by 2.1% in 2009 and then a further 1.3% in 2010. From 2011 the federation believes that there will be a sharp increase in house prices rising by 5.2% in 2011, 9.2% in 2012 and 9.3% in 2013. If these forecasts are correct this will put the average house price up to £274,700.

The report also looked into the effect of the credit crunch on housing development. The federation found that demand for housing continues to grow but developers, who have been badly hit by the credit crunch, are scaling back developments. At the present time only 75% of the housing that the country needs is being constructed.

James Kingdom , senior research analyst with Colliers CRE, told PIN: “I think that a rise of over 23% by 2013 is a fair assumption. I have concerns regarding the NHF’s short-term figures, a fall of 2.1% in 2009 is a very conservative estimate. I believe that prices will begin to rise in 2011 but supply will still be an issue. House-builders currently well below the Government’s target of 244,000 new homes a year and construction is expected to fall further this year. With this continued lack of supply I expect house prices to rise aggressively when the property market recovers from this downturn.”