Rightmove expect the property market to be positive and more traditional during 2006 without the peaks and troughs experienced over the last 2 years.

This is based upon the market’s sound foundations and a continuation of the recovery observed during the second half of 2005 said the firm’s December property index.

	December	November
Average property asking price	£196,181	£197,855
% Change in month	-0.8%	+0.8%
% Change in past year	+3.4%	+4.0%
Monthly index (Jan 2002=100)	159.6	161.0

Sellers are continuing to be realistic, adjusting prices to suit market conditions, this is evidenced by the traditional cutting of prices in the month prior to Christmas by 0.8% (£1,674). Average prices of newly marketed property are now broadly at the same level as 8 months ago encouraging more buyer activity. Whilst over-priced anomalies left over from the boom partly ironed themselves out this year, 2006 will see greater pricing transparency, clearly highlighting over ambitious sellers.

The market recovery is again highlighted by the downward trend in unsold property stocks per estate agency branch. These have fallen from 69 to 65 in the last month, as agents report encouraging November sales which look set to continue into next year.

Rightmove forecasts a modest national annual increase in average asking prices of around 4% for 2006. This is broadly in line with this year’s annual rate of 3.4%. Affordability constraints, especially amongst first time buyers, will cap price rises to the levels of average wage inflation for 2006 and some years beyond.

Conversely, price falls will be prevented by the ongoing stability of the UK economy. We have, for example, historically low rates of finance, an unprecedented run of positive growth in Gross Domestic Product, and high and stable levels of employment. Combine this with the fact that interest rates are expected to do little during 2006 and it is unsurprising that confidence as well as realism is back. We predict this will be enough to push average asking prices through the £200,000 barrier in the first half of 2006, a new record.

Miles Shipside, commercial director of Rightmove commented: "Demand from new households has consistently outstripped the supply of housing. This has been a substantial factor in pushing average asking prices towards an all time high. Even a fairly modest 2% increase in 2006 will break the £200,000 barrier."

"The Government’s increasingly pro-active approach will be of ongoing interest to both existing and potential home owners as well as the industry. We all await with interest the introduction of Real Estate Investment Trusts, shared equity products, Homes Information Packs, and the planned extensive house building programme."