article-81

House prices ‘face 2008 slowdown’


Published on: 19/11/2007

House price growth is set to stall next year as the market witnesses a “significant slowdown”, building society Nationwide has warned.

It predicts that annual house price inflation in the UK will slump from its current level of 9.7% to 0% by this time next year.

Nationwide blames a slower economy, stretched affordability, tighter credit conditions and lower buy-to-let demand.

Almost all surveys suggest the market has been cooling since the summer.

Loss of ‘momentum’

The building society expects there will be a large regional variation in house price growth in the coming twelve months.

As we move into 2008, tailwinds are increasingly being replaced by headwinds
Fionnuala Earley, chief economist, Nationwide

Credit crunch hits mortgages

Scotland is forecast to do best with prices rising by 4%. In Northern Ireland, which has been enjoying “phenomenal” price growth of 40% plus year-on-year, Nationwide believes prices will fall by 5%.

Fionnuala Earley, Nationwide’s chief economist, said the “momentum” that had kept prices strong in 2007 was now fading.

“A slowing economy, tighter credit conditions, stretched affordability for first-time buyers and lower house price expectations appear likely to reduce the level of activity,” she explained.

“As we move into 2008, economic tailwinds are increasingly being replaced by headwinds,” she added.

‘Significant slowdown’

Nationwide is also predicting a cooling in the buy-to-let market.

“Poor yields, lower house-price expectations and tighter credit conditions are all likely to take some froth out of buy-to-let and limit its contribution to price growth,” said Ms Earley.

HAVE YOUR SAY
Our economic growth in recent years has been built on massively expanded personal debt
GW Peterhead

But Nationwide believes recent fears predicting a “mass exodus” from the sector appear “overdone”.

On Thursday, in its latest quarterly inflation report, the Bank of England also warned of a numb

Source: https://news.bbc.co.uk

Back to News and Articles

Call Now

BP Connections Ltd Call Us: 020 3475 2730

Read more

Discover Property

Great Properties to Rent or Let in North London

Read more

Our Services

We offer an unbeatable range of comprehensive services.

Read more