House price rise to continue in 2007

House prices will rise by an average of £1,000 throughout 2007, according to a report by the Centre for Economics and Business Research (CEBR).

However, the group predicted slower growth in 2008 and 2009, before acceleration picks up again in 2010.

There had been warnings that the recent interest rate rises would slow the housing market in the UK although the CEBR said there was no evidence that this would happen.

John Ward, one of the authors of the CEBR report said: “The underlying fundamentals of the housing market continue to support prices.

“Even though interest rates may act as a dampener on the market, people are spending considerable less of their incomes on mortgages than in the early 1990s.

“Furthermore, in many parts of the country, [housing] shortages remain acute.”

Housing shortages mean there are numerous opportunities for developers to build new homes.

The average UK house price is currently £187,000 and, according to the CEBR, will stand at £225,000 by 2010.

A recent survey from the Halifax showed that house prices in London, the south east of England and Northern Ireland registered particularly strong growth in 2006. This is likely to continue in the next few years.

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