Haart is predicting UK property prices to increase by 5% in the first half of 2006.
Its 2006 housing market forecast also reveals annual growth in the housing market is set to be 2-3%.
It also anticipates Self Invested Pension Plans and Home Information Packs will boost the housing market.
Paul Smith, chief executive of haart estate agents, says: “This year has been a period of realignment for the housing market. Sellers have started to realise they need to price their property realistically and the market has consequently readjusted.
“However, now we are seeing higher levels of activity, as confidence has started to return and buyers are realising the market is not going to crash. We expect this positive level of activity to carry over to the first half of the year as a 12 months worth of pent up activity is released.
“Throughout 2006 the combined impact of Self Invested Personal Pensions and Home Information Packs will also inevitably impact on the market.
“We predict there will be an increase in demand for properties with the introduction of SIPPs and this demand will be met by a rush of sellers who want to sell their property prior to the introduction of HIPs.
“However home buyers are a lot more cautious now and we are not going to see the high levels of inflation of recent years.”