The Council of Mortgage Lenders last week upgraded its house price rise forecast for 2006 from 2% to 7%, despite the country’s biggest lender Halifax predicting a neutral period for prices.Although the CML expects modest falls in transaction levels at the end of 2006 and into 2007, it says the prospects for 2008 are more positive, with increased demand from home owners and buy-to-let investors. Jim Cunningham, senior economist at the CML and author of the forecast, says: “The small rise in short-term interest rates expected in the second half of this year combined with the rise in fixed term rates we have already seen is likely to result in a modest fall in transactions toward the end of 2006. “But the benign inflation outlook should mean lower interest rates by early 2008. This should support demand from buyers and buy-to-let investors and result in stronger house price growth.” Property sales are also set to be stronger than the CML previously expected, prompting a rise in its forecast for this year to 1.2 million, up from the previous prediction of 0.97 million. But Halifax’s house price index shows house prices increased by 0.1% in May, the smallest monthly rise since January when prices fell by 0.2%. It says the stronger pattern of house price growth in the second half of 2005 compared with the first half should mean that annual house price growth moderates during 2006. Martin Ellis, chief economist at Halifax, says: “The pressure on the household sector resulting from increased unemployment and significantly higher bills, together with high house prices in relation to earnings, is likely to constrain housing demand and curb price growth and sales activity this year.”
- Top trends
- Top trends
Infinity Mortgages has joined Mortgage Intelligences direct to lender panel.Mortgage Intelligences appointed representatives and directly authorised brokers will have access to Infinitys specialist lending range with immediate effect. With rates starting from 4.45% at one year discount, the range encompasses near prime, light and express categories of credit. Infinitys addition takes Mortgage Intelligences panel to […]
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