House prices to rise by 8%

Going up: new growth in the London housing market
The Weekender

Sign up to our free weekly newsletter for exclusive competitions, offers and theatre ticket deals

I would like to be emailed about offers, event and updates from Evening Standard. Read our privacy notice.

House prices are set to rise by eight per cent or more in London next year, according to the UK's biggest lender.

The "three pillars" of low interest rates, high employment and good affordability will underpin the housing market into 2004, according to the Halifax.

The bullish forecast will please home owners who have been worried by warnings of possible price falls.

But the forecast will add to the despair of people still trying to get onto the housing ladder in London.

Halifax warned that the problems for firsttime buyers - until now confined to London and the Home Counties - would extend to the Midlands and the North next year.

The Halifax home loans group played down fears of a serious downturn in the market, but added that the North would continue to narrow the gap with the South.

It is predicting another year of bumper house price growth for the North with prices growing by another 17 per cent.

Lagging behind next year, if forecasts are accurate, will be the South-West and the South-East outside Greater London. Overall prices in the UK will also grow by eight per cent, compared to the previous three years increases which were 12 per cent, 26 per cent and 15 per cent.

After a lull at the start of the year, during which many experts believed the housing market had finally hit the buffers, sales activity has taken off again, breathing new life into property prices.

Nationwide recently said house price inflation was on course to hit its own fullyear forecast of 15 per cent. The building society expects it to slow to nine per cent next year, with the figure for London around five per cent.

The upbeat forecasts are a relief to homeowners after claims that hundreds of thousands of households will be in negative equity by 2007, most of them in London and the South-East.

Experts have dismissed the claims as scaremongering, pointing out that mortgage payments as a proportion of incomes are low by historical standards, despite the recent rise in interest rates.

Create a FREE account to continue reading

eros

Registration is a free and easy way to support our journalism.

Join our community where you can: comment on stories; sign up to newsletters; enter competitions and access content on our app.

Your email address

Must be at least 6 characters, include an upper and lower case character and a number

You must be at least 18 years old to create an account

* Required fields

Already have an account? SIGN IN

By clicking Create Account you confirm that your data has been entered correctly and you have read and agree to our Terms of use , Cookie policy and Privacy policy .

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in

MORE ABOUT