The Council of Mortgage Lenders has predicted that house prices in the UK will end the year three times higher than they originally thought, with gross lending reaching £310 billion.
They also expect interest rates to finish 2006 at 4.75%, and are expecting to see more arrears and repossessions.
The council believes that 2008 looks brighter, as lower interest rates are expected, resulting in strong house price growth.
Our view
These thoughts are much inline with our own. We have been predicting interest rate increases on the back of stronger house prices for some time.