House prices set to rise again

HOUSE prices in Suffolk are expected to buck the trend and rise above the national average at the start of 2005 – despite evidence that the property market has been slowing down.

HOUSE prices in Suffolk are expected to buck the trend and rise above the national average at the start of 2005 – despite evidence that the property market has been slowing down.

The comments were made after a report from the Royal Institute of Chartered Surveyors (RICS) predicted that national house price rises will slow to just 3% in the New Year because higher interest rates and a modest economic slowdown will lead to lacklustre conditions.

This is compared to an increase of 13% for 2004, when prices boomed in the first half of the year but stagnated in the later stages.

But early indications in Suffolk are that the property market, although slowing down, could see a revival in the first quarter of the year.


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Chartered surveyor Talfryn Llewellyn, head of the country house department for Suffolk at Bidwells property consultants, said: "We are fortunate that at the moment we still have a very strong demand for property. There has been a lack of housing in the county for quite some time.

"I'm sure that the RICS report is correct nationally but in this area there is still a demand that needs to be fulfilled so I think we may even see a little resurgence by the end of the first quarter of 2005.

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"While we are not experiencing the market which we saw directly after the Iraq War, when there was a lot of knee jerk purchasing, we are not carrying any more stock than we would expect to at this time of year.

"Certainly in the types of property we deal with, which is in the middle to top end of the market, there is an optimistic outlook, with a lot of people organising viewings.

"The economy seems to be going in a reasonable direction and banks and financial companies are looking to pay out good bonuses which will inevitably have a knock on effect on the market in East Anglia."

However a RICS spokesperson warned that interest rate rises late last year had led to a much cooler market.

"Rising interest rates have always historically led to slower housing demand, and the current cycle has been no different," they said.

"RICS surveyors have recorded a notable increase in available supply of unsold property on the market in 2004 whilst sales activity has been lacklustre.

"Interest rate rises last year and the modest slowdown in the economy will mean that housing market conditions remain weak into early 2005.

"The ratio of property sales compared to unsold stocks, an indicator of market tightness, has fallen below its long-run average and also points to a subdued market.

"Short-term weakness in the housing market though is not necessarily a precursor to a crash in prices. The wider economic climate remains good, with employment and incomes expected to rise at a steady pace in 2005, providing support to house prices in the latter half of the year."

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