A bounce in the housing market will drive the UK back to economic health, according to a new survey.
Predicting little risk of a housing bubble, ITEM said recovering house prices would boost spending on the High Street and help to fuel growth.
ITEM is a non-governmental forecasting group which uses the Treasury’s model of the UK economy for its research.
More certain market conditions will encourage house-builders to increase their rates of construction, which will have a positive impact on demand for household goods, says ITEM’s latest quarterly forecast.
Its analysis comes at a time when the International Monetary Fund has upgraded its prospects for the UK economy.
ITEM says Government schemes such as Help to Buy will boost house prices by 3.5 per cent this year, 6.6 per cent next year and 6.7 per cent by 2015. Transactions are expected to increase by 11.9 per cent this year, it added.
Strutt & Parker’s National Open House Day last month bore this optimism out, the agency said last week.
It resulted in a record number of viewings and more than 100 offers being made for homes.
Sally Harrison, from Strutt & Parker’s Market Harborough office at 41 High Street, said: “The warm weather held out for our Open House Day and there was positivity amongst buyers, many of whom are now focussing on their sale or purchase, against the background of better confidence in the market and a genuine feeling that the recession is behind us.
“They are now much keener to make a move.”
Story by Alex Blackwell
Follow Alex on Twitter, @BlackwellHarb.