Fionnuala Earley Market Quotations

While there is uncertainty about the economy at present we still expect the next move in interest rates will be down and that this is likely early in 2006. But while the market responded quite swiftly to the rate cut in August, we do not expect a cut to cause annual house price inflation to accelerate back up to levels seen in early 2005.

There is a supportive environment for prices. Nationwide expects the market to remain fairly stable in the next year.

The housing market got off to a strong start in 2006. This is a significant increase in price and confirms the strengthening trend we have seen since October.

The continued pickup in mortgage approvals suggests that the market will strengthen further over the next few months.

November's data suggests that the market has settled back down to the pattern of small rises in some months and small falls in others, with prices overall growing only very slowly.

The FTSE-100 grew by 16 percent in 2005, compared to housing market growth of 3 percent. But the FTSE still remains 10 percent below its 1999 level, whereas house prices are more than twice as high as than at the end of 1999.

The current background suggests that the market will continue to cool in a contained fashion, but it will be some time before we can expect prices and activity to return to the growth rates seen in the last two years.

Estate agents have consistently reported increased buyer interest over the last few months, which should help to support the market going forward,

We think that it is far too early to say that the market has reached a turning point and that prices will continue to accelerate from here.