David Bexon, managing director of SmartNew
Homes.com, said with demand continuing to outstrip supply, average house prices would increase by between 2.5 per cent to 4 per cent. He added focus would shift toward the development of more family homes.
Bexon said: “I anticipate interest rates to stabilise following a further rise in the Spring, dropping back by 0.25 per cent in 2008. I would urge the Bank of England to think carefully about the impact of future rises on the more vulnerable groups of the market.
“The government’s focus on the building of more family homes will be welcomed by developers and homebuyers alike and I am confident this revision in planning policy will allow house builders to better meet the needs of the UK’s changing demographics.”
However, Rod Murdison, proprietor of Murdison & Browning, said developers were unlikely to move towards building family homes, and would stay with what made them the most money – two-bed flats. He added: “It’s difficult to predict how rates will go. My only fear is the instability of the US economy. Much of our economy is linked to the US and the dollar is currently very weak. If the US economy failed badly, the consequences for the UK could be great.”
