Philip Davies, chief executive of Linden Homes, commented: "I expect to see price rises in the region of 3% nationally in 2007, driven by the continued shortage of new homes in the UK and underpinned by stable interest rates, which are likely to remain at 5%.
"Current levels of housebuilding will increase moderately as local authorities begin to respond to PPS3 and formulate plans for the release of land for development. If the Government's new planning policy PPS3, announced recently, is successful in increasing the number of new family homes, we are likely to see an increase in townhouses as land remains in short supply.
"There will be no let up for first-time buyers, who will continue to struggle to buy a property, despite the expansion of the Government's shared ownership scheme and continued relaxation in lending criteria from mortgage lenders. They will rely on deals from developers to ease the cost of buying and assistance with stamp duty and legal fee payments, as well as financial help with deposit payments from parents.
"Major regeneration areas such as Bristol and Southampton will offer excellent opportunities for property investors in 2007, with considerable business investment and inward migration driving house price growth. Expectations of investors will remain high, with demands for good value furniture packages and strong rental guarantees setting the precedence for developers.
"Energy-efficient housebuilding will undoubtedly be the biggest single issue for the industry in 2007, as housebuilders respond to Government calls for 100% zero carbon new homes in ten years' time. This timescale is an enormous challenge to developers, some of which have been experimenting with individual measures to generate renewable energy on site over recent years. However, there is still a long way to go until the vision of every single new home in the UK being zero carbon can become a reality."
