House prices to rise - but not by much
HOMEOWNERS in East Anglia can expect to see the value of the property rise by a further 6% in the next 12 months, experts have predicted.The estimate was last night welcomed as good news for existing home owners whose properties will not lose value– and for first time buyers who will not see the housing market racing away from them as in recent years.
HOMEOWNERS in East Anglia can expect to see the value of the property rise by a further 6% in the next 12 months, experts have predicted.
The estimate was last night welcomed as good news for existing home owners whose properties will not lose value– and for first time buyers who will not see the housing market racing away from them as in recent years.
According to the economic forecast for 2004 drawn up by the Royal Institution of Chartered Surveyors, residential property prices will increase by only a fraction of the rises seen this year.
The prediction, which is based on the government's new monthly house price index, is around half the 11% rise expected for this year and nearly a third of the actual figure of 15% recorded for 2003.
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The gradual growth in interest rates is being blamed for the slowdown, but the lack of properties coming on to the market and high demand will exert pressure on prices in the first half of next year.
The institute said the market across the UK will still see huge regional variations with the London market and other southern regions' price increases remaining subdued at 5%, and northern regions continuing to rise by more than 10% - significantly less than in 2003.
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Chief economist at the institute, Milan Khatri, said: "The question on everyone's lips is will the housing market crash next year – our response is no but, as always, this will depend on the continuing strength of the overall economy and low interest rates."
Gary Smith, chairman of the Suffolk branch of the National Association of Estate Agents, said: "Small increases will be welcome to everybody.
"First time buyers seeing the market held up will perhaps be able to get on the ladder. They will welcome a slight easing in the market, not seeing prices race away from them quite so quickly.
"If you are already on the property ladder any price rise is welcome, you do not want to see your property going down in value.''
Alec Watt, East Anglia area managing director for Bradford and Bingley Estate Agents, said: "The housing market will remain stable with a steady national price rise of around 5-7% as long as it is unaffected by outside influences.
"I feel the strong activity we have experienced in the second half of 2003 will continue well into next year."
Mr Watt said that Sudbury was a property hotspot last year, seeing rises of around 5% on average. He said he believed the lack of new build homes available had led to property shortages and prices were also pushed up as buyers from London and south Essex looked to move into the town.
Chelmsford also experienced rises of about 6% on average in 2003, due to a return of first-time buyers and an increase in buy to let investors.
There was a surge in prices in the northern regions of England, and the spread of investment buying of property from London and the south east to the rest of the country.