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Regional Variations Cont..
Date Added 22/12/2006
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Regional variations to characterise housing market in 2007
Contd...
Interest rates
Following the increase of interest rates to 5% in November, leading economists are now divided over the movement of rates in the early part of next year. While the recent rises may help to calm house price inflation in London and the South East, there are a number of already underperforming areas across the rest of the UK that are likely to suffer further if there is another rate rise.
With this in mind, the NAEA is warning the Bank of England not to be governed by the London market when making decisions on interest rates next year.
Consumer confidence
Consumers have demonstrated a renewed confidence in 2006 and the NAEA expects this to continue into 2007.
With many set to take advantage of the higher lending multiples now being offered by banks, some could run into problems if there is a significant rise in interest rates. The NAEA is advising home buyers to plan carefully and be realistic about what they can afford in 2007.
First time buyers
Although NAEA estate agents have reported an increase in the number of first time buyer sales recently, first timers are likely to continue experiencing difficulties next year if issues such as affordability and stamp duty remain unchecked. The NAEA urges the Chancellor to seriously consider these when looking at his budget for the next financial year.
HIPs
The proposed HIPs legislation – due to come into effect in June 2007 – looms as an unknown factor when making predictions for the coming year. With June usually a busy time for estate agency, it is uncertain what effect the Packs will have. The usual trends of supply and demand are likely to be severely disrupted with buyer reactions hard to predict.
We hope you have found this months information sheet useful and please do not
hesitate to contact us if we can help you in any way.
Drewery Property Services
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