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House prices will remain stable in 2006, says Propertyfinder

Propertyfinder.com predicts that interest rates and house prices will remain stable throughout 2006.

Jim Buckle, managing director at Propertyfinder.com, says: The dark days of late 2004 and early 2005 for the housing market are well and truly behind us. Propertyfinder.coms research tracking buyer and seller confidence is a good predictor of housing transaction volumes and shows that transactions are set to increase into the New Year by around 30% compared to last year. Interest rates are not likely to move much so we cannot expect much stimulation from the Bank of England.

We think that interest rates will end 2006 at the 4.5% level. The city is giving a necessary boost to the market in London and the South East where the housing market is already improving. However, we expect regions further north to take more time to follow suit. Despite a much healthier market in transaction terms, we dont expect much movement on actual prices and are forecasting rises of 2.5% for the UK overall.

Nicholas Leeming FRICS, client director at Propertyfinder.com, adds: Throughout 2005 we consistently maintained that the property market was on a much firmer footing than many speculated. There is no suggestion that we are returning to the boom days, but 2006 should at least see a return to more normal levels of activity. With house prices rising in line with inflation, the affordability of housing will actually improve as wages rise more quickly.

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Case study: administration — managing group life schemes

Our client leads the global market in high-tech electronics manufacturing and digital media. The trustees of the company’s final salary pension scheme insure death-in-service lump sum and dependants’ pension death benefits for active employees, as well as dependants’ pension benefits for deferred members (those who have left service).

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