Surveyors Say House Prices Won't Change Next Year
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.....
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