House Prices House Prices: Expert Advice

Date Published:

28/05/2008

Hometrack (Housing Intelligence)

'The rise in interest rates over the last year mean that affordability levels are at a 15 year high and this is acting as a brake on house price inflation, which has been slowing for the last six months,' says Richard Donnell, Director of Research.

'If rates stayed at current levels for the foreseeable future then house price inflation would be close to 0 per cent in 2008 and 2009. We think this is unlikely and lower interest rates are the biggest factor that will ease affordability pressures in the next six months.

Credit: Image Source

'Over the long term, house prices rise in line with earnings but the ratio has become stretched recently, which is why we need to see a period of low, single-digit house price growth to allow a re-alignment of house prices and incomes. A large fall in nominal house prices remains unlikely in the absence of economic problems.

'There are differences between regions in terms of house prices - the north-south divide closed in 2001-2005 but opened slightly in the last 18 months. The relative position of house prices is unlikely to change markedly over the next few years.'

House Prices: A Conclusion

So, there you have it from the experts who are united in their opinions: interest rates have peaked and are likely to fall; the housing market's slowing down but prices won't plunge, and the situation's no easier for first time buyers. Good news for those planning to move up the housing ladder - but not for those struggling to get on it.

National Association of Estate Agents
www.naea.co.uk

Council of Mortgage Lenders
www.cml.org.uk

Royal Institute of Chartered Surveyors
www.rics.org

Hometrack
www.hometrack.co.uk

The views represented in this article are those of the author and not of Channel 4. The purpose of the article is to provide general information only and does not constitute financial, investment, legal or other advice.You should not rely on any information provided in this article and you should always seek out independent professional advice relevant to your own particular circumstances.