Five percent residential property price increase anticipated
Britain’s Centre for Economic and Business Research published its most recent projection for the country’s housing sales market and predicts a 5% rise in residential property prices before the end of the year. Two factors have converged to ensure a prosperous year for those looking to sell properties—namely, the fact that borrowing costs are still low, while the supply of available houses for sale is limited. The Centre believes that mortgage prices are likely to remain low, with the Bank of England keeping the base rate at 0.5%.
But the predictions for 2010 are slightly more cautious and conservative than they were before, as the Centre had previously predicted a 6% increase in values. What convinced market specialists to alter their prediction was the fact that the poor weather this past winter and early spring dampened the mood in the housing sales sector, while concerns over rising taxation may have also limited enthusiasm for properties and investment.
There is also a level of uncertainty thanks to the seemingly unpredictable parliamentary election scheduled for 6 May 2010.Prime Minister Gordon Brown, however, was quick to inject the topic of housing sales into his debate performance, by promising to ensure that interest rates stay low. The Centre believes that there is a good chance that mortgage rates will fall even further—by approximately 1% by early 2011, bringing the average loan price to 3%.