Homeowners should not put off selling in hopes of higher prices because their properties are likely to cost the same in three years' time, warns the Centre for Economics and Business Research.
Latest findings by the CEBR predict the UK property market is heading towards a ‘soft landing’, but deem the average UK house price will be no higher in 2007 than it is today.
The Centre believes UK house price inflation will average 15.4% for 2004 and then fall to 3.5% in 2005.
The next two years after that will actually see deflation of 1.5% and 2.3% respectively, the CEBR says, before the market recovers and experiences inflation of 2.6% in 2009.
Regionally, house price inflation will be least buoyant in the North East, Scotland and Wales, with prices forecast to be 10% lower in four years’ time.
London and the South East are, however, likely to see prices increase over the next couple of years, the CEBR believes.
A survey by Paragon Mortgages also suggests the market is cooling down, arguing buy-to-let investors in both Greater London and the South East have seen rising yields on their rental properties for the third month in a row as landlords have been paying lower prices for new properties.
The buy-to-let mortgage provider says yields in the capital have risen from 6.42% in February to 6.95% in May, while the South East has seen an increase of 0.21% over the last three months.
John Heron, managing director for Paragon Mortgages, says: "Over the past few months, we've seen some firming of yields in those parts of the country where they have tended to be consistently lower.
"In fact, London landlords have seen an increase of over [half a percent] over the past quarter, reflecting lower prices paid by landlords for the properties they add to their portfolios. The average price for a rental property bought in London in May was £229,899, down from £237,950 in March," he adds.IFAonline
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