Property Market Predictions for 2007 from Channel4.com

It’s now a decade since house prices started to rise in 1996, basically uninterrupted. Real house prices are now 120% above their 1996 level, but with the latest market events, are they still set to keep growing?

1. General outlook
2. Price predictions
3. Predictions explained
4. Where's hot and where's not?
5. Useful links

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General outlook

UK property prices have continued to rise this year, but there is now talk of the price climb slowing down. However, some areas are continuing to rise, and even the most pessimistic experts aren't predicting a crash - more a flattening out. So how do things now differ from the 1990s conditions which led to the last crash, and why is new development still in demand?

Economics, trends and expert opinions, rather than a crystal ball, are involved in market forecasts, but 2007 is a little difficult to decipher, warn commentators, as some factors are causing uncertainties.

“The outlook for the property market for the coming year is much harder to call this year than last. Our expectations of a strong 2006 came true in spades, although commodity prices pushed interest rates higher than we expected. These higher rates are now clouding the waters for 2007,” says Warren Bright, chief executive of propertyfinder.com.

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"Indications are the market will retain significant momentum through the first half of 2007." David Stubbs, RICS

But for other commentators this won’t be the first time. “The housing market has confounded expectations in 2006,” says the Royal Institute of Chartered Surveyors. “The strength of the market this year has been surprising. Indications are the market will retain significant momentum through the first half of 2007 due to solid economic growth and rising employment,” says RICS economist David Stubbs.

And others are particularly cautious about the longer term, beyond the next 12 months: “The housing market is moving into uncharted territory as we enter a period of low growth and lower turnover, a trend not seen since the 1950s,” says Richard Donnell, Hometrack’s director of research.

Some regions will continue to do much better than others – investors should look north and across the Irish Sea! And there are some interesting trends, says Lelia Ferro, producer, /4Homes: “Second homes are making up to 26% in some local authorities, according to figures released by the Office of National Statistics,” she says.

“They predict this trend will rise significantly by 2011. This shows a significant trend towards property investment and development in the UK.” Linked to this is the boom in country properties’ prices, linked to city workers’ bonuses being used to buy these second properties.

Price predictions >>

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