| UK
House Prices Situation: Strong
UK
House Prices Forecast: Continued growth early in 2007,
possible slowdown later in the year.
Northern
Ireland Prices Overtake UK Average
For
the first time since 1980, the average house
price in Northern Ireland is higher than the
UK average, according to new figures from the UK's biggest
building society, Nationwide.
2006
saw Northern Ireland's house prices grow
by a spectacular 44.1%, causing the average price to
increase to £181,031, leapfrogging
the UK average of £172,065.
Experts
Divided Over House Price Affordability
A
survey of 41 economists performed by the Financial Times
has shown that 30/41 of them believe that current house
prices are sustainable, citing relatively low
mortgage rates and a strong employment market as evidence
that people can afford current prices.
In
contrast, a study performed by Lombard Street Research
(LSR) for the Daily Telegraph claims that houses are
at their most overvalued for 15 years.
LSR maintain an affordability index, and say that this
has fallen consistently over the last year.
LSR,
who have predicted 2007 house price increases of 10%-15%,
believe that falling affordability is becoming a real
danger. Diana Choyleva, head of UK services at LSR,
said that "If there is strong house price
inflation this year in the low double digits
and we have base rates peaking at 5.25% then house prices
could become unaffordable by 2008."
LSR's
forecast for 2006 was very accurate, correctly predicting
a 10% growth in average prices.
Sellers
Trying To Get Out Before Prices Fall?
The
owner of UK property website PrimeMove.com, Henry Pryor,
has said that he believes house prices may have peaked
at the end of 2006. Pryor said that in November he started
to notice a trend of people who were "motivated
by greed" selling their homes without buying another
property, because they feared the market was about to
fall.
In
an interview with the Financial Times, Pryor said that
"We may look back and say the fourth quarter of
2006 was the peak."
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