Will UK property prices rise in 2007?

We continue to monitor the UK property market in our attempts to bring you the latest information on UK house price movements.

Figures for May 2006 show that house prices are still rising, according to a number of industry experts. Rightmove, the popular property website, reported an increase of some 2% for May. This follows a rise of 1.1% for April.

Such an increase, while still some way short of a housing boom, does indicate that some anlaysts may have been wide of the mark with their more pessimistic predictions that were being witnessed earlier in 2006. What does this mean for the future of the UK housing market? Or is it simply too early to tell?

Looking more deeply into the figures we can try to identify underlying trends. House prices have, over the long term, generally increased in the United Kingdom. Such increases were reflected in the comments of the President of the National Association of Estate Agents, Christopher Hall, who said:

"I am confident the average house price will increase by up to 100 per cent over the coming 10 years, so my advice is to continue to invest in bricks and mortar."

Such advice may be sound but you need to remember that it's a representative of estate agents that is making the statement, so hardly an objective, independent observer!

Nevertheless, the comment made by Mr Hall does make some sense. After all, given the figures for previous decades, suggesting that house prices will double within the next 10 years may not be such an outrageous claim.

A spokesman for the Royal Institute of Chartered Surveyors noted that the rise of house prices in May 2006 may suggest a return of confidence to the housing market, boosted by an economic climate that still appears to be relatively healthy.