The broad consensus is that the market is expected to be flat this year, with most forecasters predicting house price rises of up to 3%. But, after the one and only interest rate cut of last year, there’s less agreement as to whether interest rates will move north or south. So, will 2006 be a good time to buy, sell – or borrow?

Nationwide

When Nationwide came out with its 2006 forecast for house price inflation to be between 0 and 3%, the BBC reported that Nationwide said house prices would rise, and This is Money said it meant house prices could fall, on the basis that general inflation will be over 2%. Worth thinking about?

RPI

Dedicated to Professor Andrew Oswald’s famed warning of January 2003 – he urged everyone to sell up double quick, because of an impending 30% price fall which would carpet estate agents’ offices in blood – we think there will be at least four occasions this year when the Daily Express will scream from its front pages in the largest typeface you’ve ever seen that the housing market faces a crash.

John Charcol

Easily the most upbeat of the commentators, it predicts 5.5% house price inflation this year and three 0.25% cuts in interest rates, the first in the first quarter of this year. But it also warns that the housing market will worry about the introduction of Home Information Packs in 2007, although it also suggests that HIPs won’t happen: “The closer we get to a General Election the less likely the Government will be prepared to risk the voters’ wrath by inflicting on them this extra cost of selling a property. With e-commerce increasingly becoming part of the house buying process, HIPs are yesterday’s solution to yesterday’s problem.”

Halifax

The Halifax forecasts there will be house price inflation of up to 8% in the first half of the year before easing later on to 3%. Mystifyingly, though, the Halifax predicts that property transactions in England and Wales will increase from 1.5 million in 2005 to 1.6 millon this year.

CML

However, the Council of Mortgage Lenders has said that transactions in 2005 are likely to be 970,000. The CML predicts further falls, to 920,000 this year and next. These compare with the 1.23 million transactions in 2004. Don’t any of the other commentators read these reports?

Countrywide

The UK’s largest estate agents, Countrywide also warn that the number of completed transactions in 2005 is likely to turn out to be the lowest for 30 years, and while some unkind souls say Countrywide has underperformed in comparison to the rest of the market, its boss Harry Hill is adamant that anyone who believes that 2005 was a good one is either telling porkies or is not in possession of the facts.

Hometrack

Hometrack estimates there to have been 1.23 million transactions last year (hello?), which it expects to fall to 1.17 million this. Hometrack forecasts house prices to rise by just one per cent this year and by an average of 2.1% per year over the next three years.

RICS

The Royal Institution of Chartered Surveyors is one of the chirpiest of forecasters, predicting house price inflation of 4% both this year and next, and also predicting a ‘firm’ rise in transaction levels.

Rightmove

Rightmove also predicts that asking prices will rise by 4%, shooting the average asking price through the £200,000 mark for the first time.

Propertyfinder

Propertyfinder is also optimistic, forecasting transactions up by 30% at the start of the year, compared with the first part of last year. It suggests that house prices will rise 2.5% overall.

Connells

Connells - the second largest chain of estate agents - is perhaps the most optimistic of all, expecting to see such an increase in activity early this year that it fears there may not be enough valuers to do all the work. In preparation, the firm has built a “suitably robust valuers’ panel to ensure that cases can be turned around quickly and efficiently”.

Bradford & Bingley

Bradford & Bingley predict a cut of 0.25% in interest rates before long, and house price inflation of 2–3%.

Jones Lang LaSalle

Jones Lang LaSalle predict house price inflation of 2–3%, but say the London market could be fuelled by record City bonuses. But overall, cautions the firm, an over-supply of new apartments in many towns and cities, lower levels of demand from buy-to-let investors and the Government’s U-turn on SIPPs will all help subdue demand for residential property.

New homes

Smart New Homes agrees that the SIPPs debacle did not help and points out that between November 2004 and November 2005, prices of new homes fell by 4.8%. It says developers found it tough to make sales and that new apartments now make up 55% of all new builds, compared with 30% of detached homes. It also predicts a rate rise this year and, while it hopes for a 2% rise in new home prices, it warns that a lot is hanging on the first 12 weeks of this year.