Housing market predictions for 2007

Growth in the housing market in the UK exceeded many analysts’ expectations in 2006. While many suggested price growth would only reach 2% or 3%, average house price inflation reached almost 10%.

So what are the experts’ predictions for 2007, and will these be accurate? Representatives from mortgage lenders and industry bodies were asked for their opinions.

There is a wide range of views. The economic research group Capital Economics expects growth of just 3.5%, while the Nationwide building society has predicted house price inflation of between 5% and 8%.

All the analysts expect house prices to continue to rise throughout 2007. The representatives of Halifax, Britain’s biggest mortgage lender, believes London and Northern Ireland will see the biggest increases, which continues the pattern seen in the last months of 2006.

Both the Council of Mortgage Lenders and the Royal Institution of Chartered Surveyors expect growth of 7% in 2007, with the CML going on to predict 5% growth in 2008.

Both groups also suggest that re-mortgages will fall, as consumers cut down on outgoings.

With all the groups surveyed predicting growth in house prices, 2007 looks to be another good year for property developers.

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