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Average English house price to rise by forty per cent in five years

By 2012, the average house price in the UK is predicted to rise by 40 per cent to £302,400, according to the National Housing Federation (NHF). Due to high interest rates, house price growth should slow initially to just two per cent a year for the next two years, but from 2009 on, the NHF predicts that house prices will rise by ten per cent a year, as a result of lower mortgage rates and housing shortages.The NHF warned that whilst such a boom might provide short-term reassurance, in the long-term the rise "carried a sting in its tail", for the next generation trying to get on to the property ladder.David Orr, chief executive of the National Housing Federation, said: "Our projections show that it isn't going to get any easier to buy a house in this country."A growing number of people will find that their only hope of finding a decent affordable home is through a housing association."He added: "Home owners might see this as good news, but most will only benefit if they can sell up and move to a smaller property. "In fact, soaring house prices are having a disastrous impact on the country."We are seeing families squeezed into poor housing; employers struggling to recruit key staff who cannot afford housing costs; communities being torn apart as people move away in search of cheaper homes. "Unless we do something radical about housing supply we will see more overcrowding, more grown up sons and daughters unable to move out of the parental home, more households living in unfit homes"The report found that the average house price in England was almost 11 times the national wage last year, rising by a vast 135 per cent since 1997. Since 1997, wages have only risen by 35 per cent.

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