House prices will be ‘up £1,000 a month’ in 2007
House prices will go up £1,000 a month throughout 2007, according to the latest projections from the Centre for Economics and Business Research (CEBR).
The CEBR said that it saw no evidence that higher interest rates will change the desire of homebuyers to make a UK investment in property and that as a result prices will not be adversely affected. It told the ‘Observer’ newspaper that it expected house prices to rise 7.6% over the year.
Slower growth is expected in 2008 and 2009, before picking up again in 2010, but the CEBR certainly does not see a ‘correction’ (or decrease) in prices of between 15% and 20% that some analysts have predicted.
John Ward, one of the report’s authors, said: “The underlying fundamentals of the housing market – the main arena for UK investment for many people – continue to support prices.
“Even though interest rates may act as a dampener on the market, people are spending considerably less of their incomes on mortgages than in the early ’90s. Furthermore, in many parts of the country, supplies of housing stock remain short.”
The average house price was £187,000 now and was likely to reach £225,000 by 2010, the CEBR said.
Recent research into the way people make their UK investment in property showed that Northern Ireland recorded the biggest gains last year, with London and the South East also showing strong growth, partly as a result of large City bonuses being paid.