House prices ''to steady next year'' - commercial mortgages

18 December 2006

House prices are expected to be steadier across the UK next year, according to an industry group.

The National Association of Estate Agents (NAEA) predicted that 2007 would see an increase in consumer confidence and more modest increases in house prices.

This could lead to more people taking out commercial mortgages for letting purposes.

The association is forecasting a rise of around five per cent, following this year''s increase of approximately nine per cent.

Available supplies of property is also expected to be become a major issue, particularly in certain parts of the country, as shortages in areas such as the south-east have led to high prices which distort the national figure.

The NAEA is calling on the Bank of England (BoE) to take regional variations into account during future interest rate meetings and not be governed by the London market when making decisions.

Peter Bolton King, chief executive of the NAEA, said: "It is going to be increasingly difficult to make generalisations about the market as we see the gap between under-performing areas and those holding steady widen even further."

The BoE recently decided to hold interest rates at five per cent following last month''s quarter point increase.