What is going on with the housing market? Is it on the slide or will it hold steady? We asked those in the know for their insider knowledge.
By Andrea Dean
Talk of the housing market isn't just confined to dinner parties - headlines about Northern Rock's troubles and the sub-prime mortgage crisis in the US mean that our attention is focussed on it as never before. What everyone wants to know is what's really going to happen - are interest rates likely to rise, will house prices continue to fall, and what are the prospects for first time buyers? We don't have a crystal ball to look into the future but can offer you the next best thing - four experts who know the UK housing market inside out.
'I have a real hope that interest rates will not increase, particularly considering the current worldwide concern over the economy and financial sectors,' says Chief Executive Peter Bolton King, 'The latest feeling is that the next rate move might be downwards, which of course would be good news.
'If they do rise, however, then most believe it will only be by 0.25 of a percentage point. The market should be able to sustain this. The important thing is that we don't have any large jumps, which could seriously affect the already fragile market.'
'All the evidence points to a slowdown in the property market. This is not unexpected when you consider that we've had seven years of a positive market. Regionally, the picture will be varied with some areas needing more competitive pricing than others. Generally, however, the UK property market is fairly robust - unlike the USA's - and so we do not expect a severe slump in prices. Over the next year, prices are likely to remain on a level. Moving into 2009 we may well start to see a small amount of growth again. London and the South East are likely to go on bucking the trend, with continued growth.'
'Affordability is an ongoing problem. The Government is beginning to recognise this, but needs to do an awful lot more, in the form of shared ownership schemes and packages for housing associations, before it actually makes a big difference. Planning is another major issue. The government has been taking steps to reform the current system, but the problems are not going to go away overnight. In addition, unlike many other European countries, considerable household growth is predicted for the UK, which is putting pressure on housing stock. It will be many years before the supply and demand balance is restored.'
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