Region could see mini house market boom
HOUSE prices in East Anglia could rise by as much as 6% next year and in 2007, with some experts predicting a “mini boom”.A survey published by The Royal Institution of Chartered Surveyors (RICS) forecasts a 4% rise nationally in house prices in 2006 and 2007.
By Danielle Nuttall
HOUSE prices in East Anglia could rise by as much as 6% next year and in 2007, with some experts predicting a “mini boom”.
A survey published by The Royal Institution of Chartered Surveyors (RICS) forecasts a 4% rise nationally in house prices in 2006 and 2007.
But RICS regional spokesman Stuart Harris said East Anglia could outperform large parts of the country and see increases closer to 6%.
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The reason has been put down to the fact the region experienced the national slowdown in growth much quicker than in other areas and is already picking up.
“The latter half of 2005 has been rather encouraging and we could in fact see house prices being a little firmer than the 4% when you get into this time next year,” said Mr Harris, who is a partner of Carter Jonas estate agents, based throughout the region.
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“It's difficult to be too definitive - but it could be more like a 5% or 6% increase by this time next year.
“We do have very stable interest rates and we have a situation where mortgage payments as a percentage of household income is still low compared to the historic average.
“The slow down gripped this area a little bit before and what we are probably seeing is the market already rebounding a little bit more noticeably in this area.”
Colin Girling, Suffolk spokesman for the National Association of Estate Agents, said the region was likely to experience a “mini boom” next year if the Government remained on target to introduce the new home information packs.
Home information packs become compulsory in 18 months and are part of a huge shake-up of the way people buy and sell houses.
As well as home condition reports, the pack will contain the results of searches, copies of deeds and the terms of sale. The Government estimates the whole package will cost a seller around £600 plus VAT.
Mr Girling said: “If the Government keep to their schedule and bring them in 2007, the market is going to have a mini boom because people wanting to sell will put their property on the market before the packs come into force because it will cost money.
“Yes, I can see the market going up next year. At the present moment, movement is minimal but if the market does buck up then I can see 4%-5% is quite possible.
“First time buyers should be having a better chance because people won't be going out to try and buy lower priced properties at the end of the market to put in their pensions because the Government has abolished that.”
He added: “At the moment the market is very steady. I think things are going to pick up.”
Property experts in Essex were a little more cautious of the predicted house price growth.
Tim Trembath, the Essex spokesman for the RICS, said 4% rises were possible but added that home prices were currently stable.
Estate agents in Essex claim the current market is stable with prices neither rising nor falling. That stability, they say, has meant a renewed buoyancy in the housing market and the return of first time buyers.
Natalie Abrahams at Colchester firm Boydens, in Crouch Street, said: “The market is now much more buoyant and the prices have stayed much on an even keel. If prices can be held steady it will give wages a chance to catch up.”
Stephen Scrase, who is both an agent at Percival and Co in Earls Colne and the Essex secretary of the National Association of Estate Agents (NAEA), said: “We are on the level at the moment. There is a lot more realism in the market with clients taking professional advice and being more flexible with offers.”
He said 4% price increases were possible but he added that they would see a dramatic increase on high value properties and less in terms of less expensive homes.
John Pring, of Fisks, and Essex agency with a number of branches, and NAEA spokesman, said: “My view is that next year we will see prices moving in line with inflation but no more.”
Nationally, the RICS says the modest pick-up in house prices for next year reflects the impact of the August interest rate cut as well as a lift from a further expected 0.25% interest rate cut in the first half of 2006.
“This year the August interest rate cut helped to shore-up confidence in the market during the autumn and released some pent-up demand which had been held back due to concerns that interest rates may rise further, and that house prices may drop significantly,” it said.
“A key indicator that the housing market is now past its low point is that mortgage approvals have rebounded strongly hitting 113,000 in October, against an average of 100,000 over the past decade.”