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House prices to rise in 2006
16/12/2005 17:17:00
On the back of a three per cent rise in house prices this year, the Royal Institution of Chartered Surveyors (Rics) has predicted that UK property prices will rise by four per cent in 2006 and a further four per cent in 2007.
The further growth next year can be partially attributed to the effect of the interest rate cut that occurred in August and the widely expected 0.25 per cent cut that should take place in the first half of next year.
Despite having fallen for two successive years, 2006 should also see a rise in the number of purchases, while mortgage approvals will increase from 1.127 million this year, a five-year low, to 1.336 million next year.
A Rics statement said: "Low interest rates along with robust growth in employment go a long way to explaining why house prices have increased this year and will continue to do so next year."
The Rics findings contradict more pessimistic predictions announced by both Hometrack and the Nationwide Building Society.
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