Good evening / 04.12.08
Consumer Home
Consumer Home
07 June 2006
Mortgage lenders are expecting UK house prices to rise by seven per cent this year.
The Council of Mortgage Lenders (CML) has more than tripled its original prediction of a two per cent increase in house prices, made back in February.
Property sales now look likely to be stronger than they did in February, prompting the council to increase its gross lending prediction from £285 billion to £310 billion.
However, due to the new strength of the housing market, interest rates look likely to rise to 4.75 per cent by the end of the year, rather than the previously forecast 4.5 per cent, said the CML.
"The immediate signs are that demand will remain robust over the next few months. But we take the view that confidence and activity are closely associated with interest rate movements and expectations," said CML senior economist Jim Cunningham.
Figures from Halifax showed a small increase of 0.1 per cent in house prices in May, which was the smallest monthly rise since January's 0.2 per cent fall.
The annual rate of house price growth stood at 9.1 per cent, the highest for 14 months, although there were signs that housing market activity was beginning to level out, said the Halifax.
If a rise in house prices affects you and your financial commitments, check your credit report and make sure you're up to date.
© Copyright Adfero Ltd
