The Council of Mortgage Lenders (CML) has amended its forecast for the property market in 2006 and 2007 based on increasing figures in recent months.
Previous forecasts from CML put house price growth by the end of 2006 at approximately two per cent in February. This forecast has been revised considerably, with CML now quoting a figure nearer to seven per cent.
The forecast for property sales by year end has also been increased, up over 20 per cent to 1.2 million. The prediction for house price inflation for 2007 has also been raised, from two per cent to three per cent.
CML's senior economist, Jim Cunningham, said that although "the immediate signs are that demand will remain robust over the next few months", this could be tempered by the expectation that interest rates would rise in the short-term.
"We take the view that confidence and activity are closely associated with interest rate movements and expectations," he said.
"The…result [is] a modest fall in the level of transactions in the second half of this year, and we expect this to continue into 2007," Mr Cunningham concluded, although he remained optimistic of further growth in 2008.To read more about property, click here.
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