House prices ‘up 9.9% in 2006’
Halifax, the UK’s biggest mortgage lender, has said that house prices rose by 9.9% over 2006, confirming the view that property inflation accelerated last year as more people made homebuying their prime saving and investment decision.
The biggest rises were seen in Northern Ireland, where prices rose by 53%, although across the UK as a whole the average price dropped by 1% to £186,035 in December.
Halifax chief economist, Martin Ellis, said: “It remains too early to conclude that this indicates a genuine slowdown in the housing market.
“Overall, prices in the final quarter of 2006 were 4.2% higher than in the previous quarter, marking the strongest quarterly rise since the second quarter of 2004.”
These comments echo other industry assessments and last week Nationwide put house price inflation at 10.5% in 2006.
Ellis saw many reasons to be bullish about house prices in the coming year, as people made their main saving and investment into property. “Continued economic growth, rising employment and an ongoing lack of supply will drive up house prices over the coming months,” he said.
“Higher interest rates, greater pressure on household finances and subdued real earnings growth will, however, constrain housing demand. We expect house prices to increase by 4% in 2007.”