House prices are set to stagnant over the next two years according to the Council of Mortgage Lenders (CML). The CML also predicted that transactions would fall from about 1.35 million this year to 1.3 million for each of the coming two years. It has also reduced its prediction for this year of a 4% price rise to a 2% fall. It expects zero growth next year and 2% in 2007. This would suggest a price fall in real terms of about 6% from the end of 2004 to the end of 2007. The group also predicted a period of “weaker activity” in the buy-to-let market. CML’s head of research Bob Pannell said: “The indications from the estate agents and surveyors are that house price weakness is likely to persist for some.” But he added: “If the economic backdrop remains reasonably favourable, as seems likely, there is little risk of a severe housing market recession, and so we expect arrears and possessions to remain at low levels.” (All press)