UK house prices will extend their recovery this year as low borrowing costs and the shortage of homes support the property market, the Centre for Economics and Business Research (CEBR)said. Home values will rise 5% and mortgage costs will cheapen as the Bank of England keeps its key interest rate at a record low of 0.5%, the London-based group said in an e- mailed statement. The group cut its forecast for price increases this year from 6% after the tax on home purchases rose and cold weather damped demand for property. Prime Minister Gordon Brown said last week he wants to keep interest rates “low” for homeowners and homebuyers as he debated on television with the Conservatives’ David Cameron and Liberal Democrat leader Nick Clegg before the May 6 election.

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