2005 Housing forecast

Citation

(2005), "2005 Housing forecast", Structural Survey, Vol. 23 No. 2. https://doi.org/10.1108/ss.2005.11023bab.003

2005 Housing forecast

Keywords: Housing, Prices, Interest rates

According to the Nationwide forecast 2005, the price of an average UK property is forecast to rise just 2 per cent in 2005. The forecast for 2004 was originally 9 per cent, then it was revised to 15 per cent and the expectation is that 2004 will end up at around 13-14 per cent. The interest rate increases over the last few months have acted as a brake on prices and more realistic price expectations are expected to continue this trend. The Nationwide also forecasts that interest rates will rise again – but will not go much beyond 5 per cent. As a result they expect initial mortgage payments as a percentage of take home pay to rise from 24 per cent in November 2003 to 31 per cent by the end of 2005. Meanwhile, mortgage approvals have fallen to their lowest level in nearly five years, according to new figures from the Bank of England. The number of loans approved fell to 83 000 in October, the lowest figure recorded since January 2000.