Brokers expect house price rise
A survey conducted by the specialist lending arm of Nationwide revealed 65 per cent of brokers expected house prices to rise in 2006, with 4 per cent expecting a fall. 31 per cent of respondents expected house prices to remain static.
The research, which asked over 1,400 brokers their 2006 predictions, further revealed optimism about the buyer market, with over half (52 per cent) anticipating a rise in buyers entering the market in 2006. 16 per cent expected fewer buyers.
Interest rate expectation was mixed with 43 per cent expecting a fall in rates while 48 per cent expected them to remain static. 9 per cent predicted a rise.
Keith Astill, managing director of UCB Home Loans, said the findings were to be expected, and matched the predictions of the lender. He said: “Brokers obviously see the housing market faring reasonably well this year and their views are broadly in line with our own.”
Astill revealed an increase in house prices of 1.4 per cent for January, with the annual growth rate at 4.4 per cent.
However, Harry Katz, principal at Norwest Consultants, argued the research went against market trends. “Housing transactions hit their lowest levels for 30 years in 2005. New-build flats accounted for 50 per cent of all new homes being built, but their prices dropped in the year to September 2005 by 5.7 per cent. The house price to earnings ratio is awful at the moment as are levels of debt,” he said.
He added his shock that so many predicted a positive 2006 and said: “What do the 65 per cent of mortgage brokers base their optimism on – gut feeling? Hope? Prayers? Great economic insight?”