Significant house price changes unlikely

Leading residential property specialists anticipate a good start to trading in 2006, but most do not expect significant changes in house prices during the next 12 months.

Leading residential property specialists anticipate a good start to trading in 2006, but most do not expect significant changes in house prices during the next 12 months.

Some local estate agents believe Norfolk values could rise between 2pc and 5pc, and property consultant Savills predicts little movement in average UK house values.

The company's latest research bulletin says the long-awaited housing market “soft landing” has arrived, and pinpoints lower levels of trading and fewer first-time buyers as major factors. It notes that the average age of first-time buyers is now 34, compared to about 30 in the mid-1980s, and adds: “Our view is that this later entry into home ownership is likely to continue, facilitated by expansion of quality accommodation in the private rented sector.”

The bulletin paints a generally optimistic picture for the foreseeable future, and says the key to house price growth will be affordability.


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“Taking account of the current levels of deposits used by buyers, and assuming that first-timers continue to enter home-ownership later in life, our measure of affordability indicates that a slowdown in house price growth will be sufficient to bring house prices into line with incomes.”

Savills adds that investor activity in new-build has dropped since its peak 18 months ago, with some developers discounting the price of brand new flats by about 15pc to stimulate sales.

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