| UK
House Prices Situation: Strong
UK
House Prices Forecast: Strong growth for Q1 & Q2
2007
House
Prices Rise for 13th Consecutive Month
Average
house prices have risen for the 13th
consecutive month, according to the Homebuyer Show,
who commissioned the report. The Royal Institute of
Chartered Surveyors, RICS, also reported continued growth,
with 50 per cent more of their members reporting a rise
in prices during November than a fall.
Jeremy
Leaf, of RICS, commented that although there is concern
over high consumer debt levels, "…strong
employment conditions and a robust economy continue
to shield the market from any dip."
2006's
Most Accurate Predictor Reveals 2007 Predictions
2006's
most accurate house price predictions
were by Lombard Street Research, who correctly predicted
an average increase of around 10 per
cent for this year.
Lombard
have just published their 2007 forecasts, which suggest
that average house prices will increase
by between 10 and 15 per cent in 2007, on the back of
record mortgage lending, low interest rates
and shortage of housing in some areas of the UK.
Diana
Choyleva, a forecaster at Lombard Street Research, said
that "House prices are not overvalued if you look
at affordability with interest rates at just 5%."
Although
Lombard predict a strong 2007, they did note that double-digit
growth this coming year could lead to a housing
market bubble developing in 2008, with the
potential for a market adjustment.
Mortgage
Lending Reaches Record High
Mortgage
lending in November reached a new high of £33.1
billion – up 9 per cent on October, and 19 per
cent on this time last year.
The
figures from the Council of Mortgage Lenders highlight
continuing strong demand for housing and suggest that
the two interest rate rises seen this
year have not yet had a significant effect on consumer
confidence, despite record consumer debt levels.
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