Surveyors Say House Prices Won't Change Next Year

Mortgages and Home

Updated on 16 December 2008 | 0 Comments

House prices in 2008 look set to remain largely unchanged, with more first time buyers taking the first step onto the ladder. That's if you believe one forecaster anyway.

A mixed bag is in store for the housing market in 2008, with house prices remaining largely unchanged, partly due to purchases by first-time buyers, a recent forecast has predicted.

The Royal Institution of Chartered Surveyors (RICS) has predicted that UK house prices are to remain broadly unchanged in 2008, although it does acknowledge that global repercussions from the credit crunch mean that the market could experience some short-term weakness.

Several recent reports have suggested that the housing market has already begun to show signs of a slowdown. The Council of Mortgage Lenders reported that gross lending declined to an estimated £30.7 billion in November, an 8% decrease from October's figures, and also 8% down from £33.2 billion in November 2006.

This is the first time that monthly lending levels have dropped below the same month in the previous year since July 2005.

Rate cut 

However, RICS isn't too gloomy. After this month's unanimous cut in the Bank of England base rate, RICS now expects the rate to be lowered to 5% during the first half of 2008. (Assuming the now famous LIBOR followed, variable mortgage rates would fall too.)

What's more, RICS isn't too downbeat about repossessions either. It predicts that repossessions are set to rise from 30,000 to 45,000 next year -- still well below the torrent of repossessions that took place during the crash of the 1990s, when that figure was closer to 80,000.

And let's not forget the first-time buyer. Initial house price falls could encourage some first-time buyers to come out to play after being pushed to the sidelines for so long. Those climbing onto the ladder for the first time could provide a boost to a flagging market in 2008.

So if you believe RICS, there won't be any major movements in house prices next year. Others may disagree.....

More: House Prices Keep On Falling | Make The Most Of Property Price Plunges

Comments

Be the first to comment

Do you want to comment on this article? You need to be signed in for this feature

Copyright © lovemoney.com All rights reserved.

 

loveMONEY.com Financial Services Limited is authorised and regulated by the Financial Conduct Authority (FCA) with Firm Reference Number (FRN): 479153.

loveMONEY.com is a company registered in England & Wales (Company Number: 7406028) with its registered address at First Floor Ridgeland House, 15 Carfax, Horsham, West Sussex, RH12 1DY, United Kingdom. loveMONEY.com Limited operates under the trading name of loveMONEY.com Financial Services Limited. We operate as a credit broker for consumer credit and do not lend directly. Our company maintains relationships with various affiliates and lenders, which we may promote within our editorial content in emails and on featured partner pages through affiliate links. Please note, that we may receive commission payments from some of the product and service providers featured on our website. In line with Consumer Duty regulations, we assess our partners to ensure they offer fair value, are transparent, and cater to the needs of all customers, including vulnerable groups. We continuously review our practices to ensure compliance with these standards. While we make every effort to ensure the accuracy and currency of our editorial content, users should independently verify information with their chosen product or service provider. This can be done by reviewing the product landing page information and the terms and conditions associated with the product. If you are uncertain whether a product is suitable, we strongly recommend seeking advice from a regulated independent financial advisor before applying for the products.