RICS (The Royal Institution of Chartered Surveyors) expects a rise in UK house prices of 4% in 2006 and 4% in 2007. RICS accurately predicted an expected upturn of 3% for 2005.
The modest pick-up in house price rises for next year reflects the impact of the August interest rate cut, as well as a lift from a further expected 0.25% interest rate cut in the first half of 2006.
With the housing market showing signs of a recovery from a marked drop in activity in the latter half of 2004, purchases are also expected to rise firmly in 2006, having fallen for two successive years. RICS expects mortgage approvals to rise from a five year low of 1.127 million in 2005 to reach 1.336 million in 2006.
RICS publishes its latest housing market survey next Tuesday, 20 December.