House prices are set to rise by 50% over the next 10 years with property values in London nearly doubling, a report predicts.
It would mean a typical house price would be around £139,000 higher than the current average of £280,000 by 2025.
The study was compiled by the Centre for Economics and Business Research for the National Association of Estate Agents (NAEA) and the Association of Residential Letting Agents.
Its forecast would see the average property in London costing £931,000 in a decade’s time, up from around £515,000 now – as housing supply shortages continue to push up prices.
Average house prices across the South East and the East of England are also expected to be well over the half-million pound mark by 2025, at £646,086 and £574,374 respectively.
Mark Hayward, managing director of the NAEA, said: “House prices are only going to go one way, and unfortunately that is up. For so many already priced out of the market, this is news aspiring house buyers will not want to hear.
“Ongoing house price inflation, combined with low wage inflation, tighter lending restrictions and a shortage of affordable housing, means owning a home will continue to be a distant dream for many.
“Increased rental costs will also make it more difficult for current renters to save for a house deposit; as much of their income will be eaten up in rent.”
The report also expects rents to surge by 27%, from the current UK average of £134 per week to £171 by 2025.
A Department for Communities and Local Government (DCLG) spokesman said: “The Government recently announced the biggest, boldest and most ambitious plan for housing in a generation with a doubling of the housing budget.
“The number of new homes is already up 25% in the last year and we are working closely with housebuilders to ensure they have the skills needed to get homes built.”