|
Nationwide is predicting a small rise in house prices for 2006, but with inflation taken into account any real gain is likely to be limited.
The building society warned that in some areas, prices could still stagnate and many new buyers will still struggle to get on the property ladder.
At best, the mortgage lender said, prices would grow by 3% over next year, following gains of 2.4% this year and 12.7% in 2004.
Should the economy not recover as Nationwide expects, there is a worst-case scenario of falls of up to 2%. But the mortgage lender believes the probability of this occurring is 'very low'.
Nationwide's economist Fionnuala Earley said: "Expectations are a key factor in the housing market, as they reflect not only people's views about likely capital gain, but also their confidence in the market."
"During 2005 we have seen these expectations stay broadly neutral, but with a positive impact in later months as consumers feel increasingly confident that a soft landing has been achieved. Their expectations of the amount by which prices will increase still remain modest at around 3%."
"We are also cautiously optimistic," she said. "Our expectation is that house price growth will remain firmly in low single digits in 2006 as the economy recovers."
With rapid price increases over the last nine years it will take some time for affordability to recover." she added.
|
Get
this news on your website !
Sponsored listings: