House price inflation in 2007 will be “slowing but still positive,”predicts John Stewart, HBF economic affairs director and Housebuilder’s economics editor. Speaking at the Housing Market Intelligence conference, Stewart offered his views on the impact of the global economic outlook on the UK’s housing market, forecasting that the market “will remain fairly flat”next year, with volumes dropping off by around 6%. “Inflation-adjusted post-tax earnings growth is zero, which suggests that the housing market is not going to take off,”said Stewart. “And we suspect that new flat prices are not rising – maybe even falling.” Stewart also reported that financial markets expect interest rates to rise to 5.25% by 2007, with another quarter point rise predicted by the year-end. Presently, the market is showing signs of continuing house price growth, with recent Halifax, Nationwide and RICS’surveys all recording price increases. Mortgage approvals have also picked up. The latest HBF monthly survey shows that housebuilders’optimism about the market has improved throughout summer, with a balance of 62% of those surveyed in September expecting increasing sales.