In summary:
*UK property prices to increase by 5 per cent in first half of the year
*Annual growth in housing market is set to be 2 - 3 per cent
*2005 – period of realignment for the housing market. Sellers have adjusted expectations on prices.
*Surge of buyers returning to the market as speculation of a housing crash has waned
*SIPPs and HIPs will both boost the housing market
Smith said: “This year has been a period of realignment for the housing market. Sellers have started to realise that they need to price their property realistically and the market has consequently readjusted. However now we are seeing higher levels of activity, as confidence has started to return and buyers are realising that the market is not going to crash. We expect this positive level of activity to carry over to the first half of the year as a 12 month’s worth of pent up activity is released.
“Throughout 2006 the combined impact of self-invested personal pensions (SIPPs) and home information packs (HIPs) will also inevitably impact on the market. We predict that there will be an increase in demand for properties with the introduction of SIPPs and this demand will be met by a rush of sellers who want to sell their property prior to the introduction of home information packs. However homebuyers are a lot more cautious now and we are not going to see the high levels of inflation of recent years.
“We forecast property prices to rise by 5 per cent in the first half of the year, although we believe that this level of activity is set to cool down and the annual growth is set to be 2-3 per cent.”
