UK expects small rises in house prices

Close to four people in five expect house prices to rise in 2006, new figures reveal.

Some 80 per cent of homebuyers believe house prices will rise this year, compared with fewer than 30 per cent last year, figures from The Homebuyer Show reveal.

Additionally, just 15 per cent think prices are on their way down, last year three times as many people expected property values to decline.

"The UK housing market seemed to really struggle throughout 2005 with prices and activity down," said Nick Clark, manager director of The Homebuyer Show.

"However with the realisation that a house price crash was highly unlikely, the market has begun to show signs of positive growth and both buyers and sellers are returning to the marketplace.

"Speculation of a reduction in interest rates should see a further boost in activity which should cause house price inflation over the whole of the UK."

Close to two in three of those questioned said they planned to buy a property in the next 12 months, with half of them thinking about investing in buy-to-let.

But homeowners are still cautious about rising house prices, saying it is their third biggest worry - after a lack of affordable housing and a change in interest rates.

As to where to buy, east London - around the proposed Olympics sites - the north-west of England and the south-east are the favoured choices for people thinking of buying a home.

For a detailed analysis of the UK property market in 2006, check out MyFinances' 2006 house price prediction page.

To find a cheap UK mortgage, go to www.myfinances.co.uk