House price decline temporary, predicts Charcol

After conflicting reports about the direction of house prices in 2005, mortgage advisor Charcol has moved to clarify forecasts.

12:54 06 December 2004

After conflicting reports about the direction of house prices in 2005, mortgage advisor Charcol has moved to clarify forecasts.

While building society Nationwide believes that house prices will increase by two per cent next year, Halifax, the UK's biggest lender, has predicted that house prices will fall by two per cent.

Ray Boulger, senior manager at Charcol, explained that although Nationwide and Halifax have different expectations for the housing market next year, the four per cent difference in their forecasts is not significant.

"What is important is that we all agree on the broad direction of the housing market, namely no crash but a period of relative stability," Mr Boulger stated.

Charcol's own estimates suggest that house price inflation will be around four per cent in 2005.

Mr Boulger added: "Confidence will return when enough people recognise not only that interest rates have peaked, but that 2005 will see lower rates."