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House Prices in 2007
By Susy Copus
Here we discuss where house prices are going in 2007. Whether you are a first time buyer or a seasoned property developer it's useful to know what lies ahead.
Quite simply, house prices are expected to rise in 2007. How much varies according to which survey you read. Halifax bank predict house prices to rise by 4% whereas the building society, Nationwide, expect prices to rise between 5-8%. The research group, Lombard Street Research, however predict prices could rise by 15% - quite a difference to 4% but bear in mind that this research group correctly predicted a price growth of 10% in 2006 whilst other surveys predicted a growth of only 2 - 4%.
Interest rates went up on 11 January to 5.25%, the third increase in six months and more increases may follow with some experts uggesting that interest rates could rise to 6%
this year. Every 0.25% rise equates to the average householder with a mortgage of £100k paying an extra £16 per month. However whether this will effect the housing market is questionable - many economists were surprised that the two interest rises in 2006 did not appear to slow down the house prices as expected.
Some mortgage lenders have moved with the price growth so that borrowers can secure mortgages up to 5 times their salaries and interest only mortgages are becoming more popular. Conditions for first time buyers are likely to worsen during 2007 and as a result of the high prices compared to salaries. As a result some lenders now offer a service where friends and family can buy a property jointly so as to get on the property ladder.
Factors supporting the prediction of price growth in 2007 are bumper city bonuses underpinning the prices in London and the South East, a strong economy, low unemployment, a growing ageing population, an increase in the number of single households and a continued shortage of supply. Factors that could slow the house price rises are increases in interest rates, over-stretched affordability and a slowing global economy.
Another factor in the market has been the public speculation that prices will continue to rise. If this changes to the view that interest rates will go up and the housing market will slow down, potential buyers may wait to see if there is a slow down and by doing so, create a slow down and a subsequent fall in prices.
The predictions for 2007 are that housing prices will continue to rise. Watch closely.
To find a property visit http://www.wheresmyproperty.com.
About the Author
Susy Copus is a property commentator and has written for the UK Property Search Engine, http://www.wheresmyproperty.com, http://www.renovatealerts.com who specialise in finding property to renovate.
Article Source: http://www.simplysearch4it.com/article/48378.html
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