The future of UK house prices
Tuesday, 03 Jan 2006 16:04
After soaring house prices since the start of the Millennium, 2005 saw the property market stall - MyFinances asks some of the sharpest minds in the industry: "What next for UK house prices?"
Since 1998 house prices have doubled, rising by 17 per cent in 2002, 15.7 per cent in 2003, and 11.8 per cent in 2004, according to the Office of the Deputy Prime Minister.
However, the Bank of England took action in late 2003 and 2004 to arrest inflation and raised interest rates to three-year highs. This effectively added over £1,000 to average mortgage payments.
Over the following months the property market collapsed, but rather than a price crash - people just stopped buying and selling.
There was a 30 per cent drop in the number of houses changing hands, while prices did stalled.
By the end of 2005 house prices in the UK had increased less than four per cent in a year, and the market was starting to recover.
Now, with confidence in the property market returning, and interest rates falling, MyFinances has asked some of the UK property market's leading lights what will happen to UK house prices in 2006.
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