House prices to rise by 7% this year
Posted: 08 Jun 2006 09:29:23 GMT
With confidence in the property market remaining high, the Council of Mortgage Lenders (CML) has this week revised its forecast for house price growth.
Back in February, the CML predicted that house prices would rise by just two per cent during the course of the year, but this has now been upwardly revised to seven per cent.
It is a measure of the buoyancy of the market so far in 2006 that the CML has had to alter its forecast so drastically and it will come as good news to those hoping to sell a property towards the end of the year.
The CML has also revised its forecast for 2007, when it believes house prices will increase by three per cent instead of two per cent.
Part of the reason for this is that activity in the market has been exceptionally strong so far this year, with the CML expecting 1.2 million sales in total, compared to its earlier prediction of 0.97 million.
Such is the strength of the property market in the UK, the CML has also altered its view on interest rates. It now expects interest rates to end both 2006 and 2007 at 4.75 per cent, as opposed to the 4.5 per cent that was suggested in February.
While this may dampen activity in the market, the CML's long-term forecast for house price growth remains healthy.