Nationwide Report Expects UK House Prices To Rise In 2006
According to the Nationwide Building Society, we can expect house prices to rise in the UK throughout 2006. The best house prices are forecast to rise by up to 3% (following a 2.4% rise in 2005 and a 12.7% rise in 2004) the Nationwide report warned that house prices may even flatline in some areas. However, the Nationwide report did warn that, at least in the first few months of 2006, house prices may actually fall in comparison to the first months of 2005 which saw strong growth.
“Our expectation is that house price growth will remain firmly in low single digits in 2006 as the economy recovers. With rapid price increases over the last nine years it will take some time for affordability to recover,” said Fionnuala Earley, an economist for the Nationwide Building Society.
The report believes that UK house prices will not crash during 2006. Strong demand and not enough new housing, low interest rates and low levels of unemployment should help maintain the property market. However, the report was based on the forecast on a recovery in the UK economy, which has recently shown signs of a significant slowdown.