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House Prices 'May Rise 16%' By End Of 2015

House prices could rise by 16% by the end of 2015, a study suggests, while there were separate indications Britain may become a nation of renters in a generation.

The predicted increase in property values was by the Centre for Economics and Business Research (CEBR) which also pointed out prices would continue to fall for much of 2011.

And it suggested values would end the year around 1.4% lower than they started.

Major banks were also expected to see improvements to their balance sheets meaning strict lending criteria would be loosened.

A separate study by high street bank Halifax showed half of people think Britain will become a nation of renters within a generation as young people give up on the dream of home ownership.

Around 77% of people who have not yet got on to the property ladder said they still aspired to buying their own home, but 64% said they thought they had no prospect of ever doing so, said Halifax.

Instead, 46% of 20 to 45-year-olds said they thought the country was becoming more like Europe, where renting is seen as the norm, and Britain would be a nation of renters within a generation.

The perception that banks are not lending was seen as one of the biggest problems, with 84% of potential first-time buyers saying banks did not want to advance them money and would find excuses to turn them down.

At the same time, 92% of the 8,000 survey respondents said they thought it was hard for first-time buyers to get a mortgage, 60% of whom thought it was either very hard or virtually impossible.

The large deposits currently required were seen as a further barrier, with only 5% of people saying they were making sacrifices to save for a deposit, while 95% said they either did not have enough spare cash to do so, were not interested in setting aside money or had tried to do so but failed.

A further 61% of potential buyers also said they were put off getting on to the property ladder by the stress and anxiety involved in applying for a mortgage.

Alison Blackwell, of the National Centre for Social Research, which compiled the report for Halifax, said: "The phenomenon of Generation Rent could have major socio-economic implications.

"It would mean fewer homeowners being able to buy and therefore fund the construction of the new homes required in the UK to meet demand, resulting in a slowing-down in the housing market.

"It could open up a widening of the wealth gap that already exists between homeowners and non homeowners. And people in Generation Rent risk insufficient finances at retirement."

Halifax said it planned to launch a first-time buyer pledge in July in response to the problems people faced getting on to the housing ladder.

This will involve it publishing a detailed overview of its lending criteria, as well as a personalised promise on how much it will advance people, without it leaving a lasting record on their credit file.

If an application is rejected, it will give customers information on why this happened and it will provide them with a plan on how to move forward regardless of whether they are successful or unsuccessful with their application.