Average home will cost £267,000 by 2018

Next year, house prices estimated to be 2.3% higher than in 2007

Forecasts from the Centre for Economics and Business Research (Cebr) suggest that a typical house in the UK will cost £227,000 in 2014, beating the 2007 peak for the first time.

Cebr also predicts the average home price will be £222,000 this year, 1.4 per cent higher than in 2012. By 2018, they expect a typical UK home will cost £267,000.

In 2014, they estimate that the Government’s Help to Buy scheme could raise prices by up to 0.8 per cent without having any appreciable impact on housing supply. But that in 2015, it could lead to an additional 4,800 homes being built.

"By 2018, we expect the typical UK home will cost over 20% more than this year," said Daniel Solomon, Cebr Economist and main author of the report. "Gradual wage and population increases will be the fundamental drivers of this medium-term trend. We expect the Chancellor’s new Help to Buy scheme will push up house prices before it raises housing supply. We predict that the scheme’s effects will be quite modest, but it could support the construction of roughly 5,000 new homes in 2015. This supply boost could provide a welcome route on to the housing ladder for a small number of aspiring homeowners."