Bradford and Bingley predict stable 2004 housing market
23 December 2003
Estate agents Bradford and Bingley have predicted house price inflation of 5 to 7 per cent for 2004 - but have warned that changes in the tax regime could stifle sustained growth.
The 2003-2004 Housing Market Review suggests that a stamp duty or income tax shock could stop the market from growing, and that a major terrorist incident could also seriously affect the market.
Commenting Gary Verity, managing director of Bradford and Bingley Estate Agents declared, "2003 was certainly a year of two halves. We witnessed a dampening down of the market in the first half due to the Iraqi conflict. This was followed by a bounce back in transactions from May onwards with sales picking up each month onwards, culminating in our busiest autumn for 10 years.”
“I think the strong activity we are currently experiencing will continue well into 2004 commencing with a New Year rush as sellers take advantage of renewed buyer confidence.”
Bradford and Bingley also predict that interest rates will rise by between 0.75 per cent and 1.25 per cent next year.
Tax rises, anticipated for next spring's Budget, are the biggest threat to the market. Mr Verity warned, “Although I would certainly welcome a reorganisation of the stamp duty bands into a more sensible system the last thing the market needs is any major increases in what many homebuyers consider to be an already expensive and unfair tax.”