| UK
House Prices Situation: Strong
UK
House Prices Forecast: Remaining strong but slower growth
throughout 2007
House
Price Forecasts – What To Believe?
In
recent weeks we have seen a variety of house
price forecasts for 2007 from various respected
sources – Halifax, Nationwide and others.
Nationwide
and Halifax both claim that house prices rose by about
10 per cent in 2006, and this is certainly a figure
that has been widely bandied around in the press.
On
the other hand, the Hometrack index, which uses data
gathered from 6,000 estate agents, claims that average
house prices rose by only 5.7 per cent
in 2006.
Predictions
for 2007 vary from 4 percent to 10 per cent - the truth
is that this average figure is not really relevant for
most people, as regional variations in house prices
are so dramatic – both in terms of price levels
and rate of growth.
So
with that in mind, what does 2007 hold? Regional breakdowns
of 2006 data suggest that the strongest growth
will be in London and the South-east, with East Anglia,
the South West and North West continuing to experience
strong growth, along with Scotland, Northern Ireland
and Wales.
The
East and West Midlands, Yorkshire and Humberside and
the North East are likely to experience much slower
growth – probably no more than the level of inflation.
Are
Higher Interest Rates Causing The Market To Slow?
New
data published by the Royal Institute of Chartered Surveyors
(RICS) suggests that the rate of growth of the housing
market might be starting to slow, in the wake
of last year's two interest rate rises.
RICS
data shows that although house prices rose in December,
the rate of increase was the lowest for four months.
37 per cent more RICS members reported a rise
in house prices than a fall in December – a positive
result, but a sharp decrease from November, when 46.9
per cent more members reported a rise than a fall.
January's
surprise interest rate rise is likely
to cause this trend to continue, but at present it is
too soon to determine a definite trend in house price
growth.
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