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House price increases drive demand for cheap mortgages

Date: Wed, 25 Jan 2006

The continued growth in the housing market is boosting the demand for cheap mortgage deals.

The centre for economics and business research (cebr) is predicting that house prices will rise by around 4.4 per cent over the next 12 months, compared to last year's 5.1 rise. However, there still appears to be strong demand for properties towards the bottom of the property ladder.

The figures from quarterly housing forecast also predict that growth in 2007 will reach around 2.8 per cent – a sign that there will be long-term demand for good value home loans and cheap mortgages.

"We expect activity in the housing market to remain buoyant through the first half of 2006 supported by a relatively benign macroeconomic environment," said Jonathan Said, economist at cebr and one of the report's authors.

Mark Pragnell, another of the report's authors, added: "For years now, too many commentators have been writing obituaries for the United Kingdom housing market - but it is quite clear there is still a lot of life left in residential property."


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