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Steady year for house prices predicted for 2007
The National Association of Estate Agents (NAEA) is predicting a steadier year for house prices across the UK in 2007 with price rises of around 5% forecast over the year. A shortage of property is still an issue and this will undoubtedly help push house prices upwards. Economists are divided over the movement of interest rates in the early part of the year. Any increases are likely to lead to the flattening out of the housing market and may cause significant problems for some homeowners who have taken advantage of the higher multiple lending being offered by some banks.
First time buyers are likely to continue experiencing difficulties is issues such as affordability and stamp duty remain unchecked and the NAEA are urging the Chancellor to seriously consider these issues when looking at the budget for the next financial year.
The proposed HIPs legislation, due to come into effect in June 2007, looms as an unknown factor when making predictions for the year ahead. With June usually a busy time for estate agency, it is uncertain what effect the Packs will have. The usual trends of supply and demand are likely to be severely disrupted with buyer reactions hard to predict.
Peter Bolton King, Chief Executive of the NAEA, comments: “In what is likely to be a quieter year than 2006, we are expecting to see modest price rises and a continuing rise in consumer confidence. I firmly believe, however, that it is going to be increasingly difficult to make generalisations about the market as we see the gap between under-performing areas and those holding steady widen even further.
“While it may be a quieter year for prices, the housing market itself could be facing significant change with the proposed HIPs legislation. This is creating huge uncertainty for the market and is a situation we will continue to be watching closely moving into next year.”
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