Property News

House prices to rise again for 2006 - 03/05/2006

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House prices in the UK are to rise beyond expectations at a rate of six per cent, according to research released today.

The centre for economics and business research, suggests increased confidence in the property market will boost property prices.

It hence revised its rate for house price growth from the figure of 4.4 per cent it stated in January, following steady growth in the financial markets.

However, first-time buyers concerned about the findings have been advised that house price inflation could slow down towards the end of 2006, as affordability ratios plummet through higher levels of unemployment.

Steady interest rate levels from the Bank of England are also likely to have an effect on affordability as the benefit of last year's rate cut starts to wane.

Jaspreet Sehmi, one of the report authors, told ITN: "We have edged up our expectations for 2006 house price growth because we expect stronger growth in the second quarter of 2006 than we previously did.

"Gains in London and the wider south east should lead the way.

"However we still believe house price inflation will slip back in the second half of the year as households come up against financial constraints."

Hometrack's monthly house price survey said house prices rose for the fifth consecutive month in April, hitting their highest point in almost 24 months.

It priced the average home in the UK at £165,000, driven by sustained recovery in south east and London markets.

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