Housing price predictions for 2008

Towards the end of 2007, there were signs that the housing market was beginning to slow. So will this continue during 2008?

Opinion in the housing industry is divided. For example, property investment company Assetz predicts that house price growth will reach 5% in 2008, as strong levels of immigration lead to continuing high demand.

Stuart Law, chief executive of Assetz, said: “While we are currently experiencing a lot of negative sentiment in the housing market, this is actually no reason to set alarm bells ringing. If people look at the fundamentals it is actually very hard to find what all the fuss is about.”

However, accountancy firm KPMG paint a grimmer picture. They predict that 130,000 people will be declared insolvent in 2008. Figures like this would severely affect consumer confidence and exacerbate the slowdown in the housing market.

The estate agents at Hamptons International put house price growth at 3% – 4% in 2008. They say the first quarter will see particularly slow growth, due to the introduction of Home Information Packs, but that this will pick up during the rest of the year.

According to Hamptons, property in central London will see high price growth.

Meanwhile, the Halifax predicts that house prices will remain as they are. Britain’s biggest mortgage lender expects that Southern England and Scotland will see modest house price growth; while this will be balanced out by equally modest falls in Northern England and the Midlands.

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