Ian Shepherdson, an economist with the banking group HSBC, forecasts a price rise of 2 per cent or more by the middle of next year. He says negative factors such as rising interest rates and tax bills badly hit the housing market this year, but these are fading.
Mortgage rates have been cut and expectations of personal tax cuts are growing.
"If our forecast of a pounds 4bn tax-cutting package is correct, then consumer confidence could well rebound strongly, lifting the housing market in its wake."
The forecast follows official figures last week tentatively suggesting signs of life in the market. Net mortgage commitments - the best indicator for future housing market activity - rose to a seven-month high in August.Reuse content