Hometrack predicts modest rise in house prices in 2006

Hometrack predicts modest rise in house prices in 2006

	Published : Wed, 28 Dec 2005 14:05 By : Phil Bateman Print this Story

LONDON: House prices in Britain rose for the first time in 18 months in December, according to Hometrack, the online housing research and database group.

Prices increased 0.1 per cent from November to an average of 160,900 pounds, the agency said, which is ample indication that the property market in the country is stabilising. It predicted prices will increase 1 per cent in 2006, against a drop of 1.6 per cent in 2005.

Director of research at Hometrack, Richard Donnell said the pick-up in the market activity in the second half of the year has clearly acted as a support to average prices. However, buyers remain highly price sensitive, he added.

Hometrack's survey covered some 3,500 real estate agents.

The agency said real estate agents had reported a 3.7 per cent increase in sales over the month, after a 4 per cent gain in November, supported by rapidly improved buyer confidence.

Mortgage bank lender HBOS Plc had said on 2 December that home prices gained for a fifth month in six in November, while the Royal Institution of Chartered Surveyors had said the prices rose for the first time in 15 months in the three months through November. Bank of England disclosed that the number of loans approved for home purchases rose to 113,000 in October from 99,000 in June.

Hometrack said five of Britain's 10 main regions recorded small increases in house prices in the run-up to Christmas. Greater London reported the strongest rise -- 0.3 per cent over the month. In central London and City area, prices went up by 1.4 per cent. Only one region reported a fall, while four regions had prices remaining at the previous level.

The survey also showed that sellers were achieving 93.5 per cent of the asking price for their homes and it was taking eight weeks to sell a property, almost double the time taken in 2004 summer, when the market was at its peak.

The overall picture now appears to be: house prices had seen boom time in 2004 and went into stagnation in 2005 and the year-end indications are that it is on to a healthy plane in the year that is coming.