Olympic effect will drive property prices
Published On 12 December 2006
Olympic effect will drive property prices The regeneration of east London in the run-up to the 2012 Olympics is likely to boost house prices in the area, Britain's biggest mortgage lender has predicted.
The HBOS (Halifax Bank of Scotland) economic forecast for 2007 said property values in London would rise by as much as eight per cent, with the "Olympic effect" attracting buyers to places such as Hackney.
Overall, house price growth is expected to moderate at four per cent – the smallest rise since 1995 and half of the eight per cent a year average since 1983.
HBOS's chief economist Martin Ellis predicted "another healthy year" for the 2007 housing market. He added: "Higher interest rates, greater pressure on household finances and subdued real earnings growth...will constrain housing demand.
"House price growth is set to ease as a result."
Demand in Chatham in Kent will be boosted by a high-speed commuter link connecting the area to central London, the report says.
And it forecasts a rise in house prices in Liverpool as the city receives investment in the run-up to the 2008 European Capital of Culture awards. However, the gap between prices in the north and south will widen by £10,000 to almost £97,500 by the end of the year.
By this time, the bank says there will be no UK town with an average house price below £100,000.
A separate 2007 forecast by the Royal Institution of Chartered Surveyors (Rics) predicts a seven per cent growth in UK house prices.
