Where Will House Prices Go In 2008?
There is no doubt that property prices will fall in 2008, but how far will they go? A number of experts give their views on where prices are going, as the credit crisis continues to affect the economy and add to the woes.
House prices have fallen and there is doom and gloom in the property market. The latest forecast is that over 350,000 homeowners will face negative equity in the near future as the values of their houses fall below the amount they had to borrow to buy them. In addition the economy is struggling to keep its head above water as the credit crisis and the subsequent fall-out continue to have a huge impact around the world.
What is the latest view of where house price are going from the experts?
The Nationwide Building Society is forecasting a house price fall in single digits (less than 10%) in 2008. ’With house purchases far below their long-term trend, it seems unlikely that there will be any rapid turnaround in housing market fortunes in the coming months,’ it says.
The Council of Mortgage Lenders is predicting a drop of 7% for house prices this year, saying that 2008 will be remembered as a very weak year for the housing market.
The Royal Institution of Chartered Surveyors is expecting a fall in house prices of around 5% this year, saying: ’The rest of the year will prove a difficult period for the housing market. Money looks set to remain tight and buyers will find that access to the market is restricted by cautious lenders.’
Banking giant HSBC is reckoning on a 10% fall this year. It comments: ’The bigger question is what will happen to house prices in 2009. Our view is that a weakening economy will keep the market subdued.’
Leaders in economic and financial analysis, Global Insight are forecasting a fall of 24% to the end of 2009. This dire prediction comes with the comment: ’If the economy starts to tank and unemployment rises sharply, it would have a large knock-on effect for the market.’
Finally, what do homeowners themselves say about the housing market? The forecast from them is for a house price fall of 7.1% in 2008. This result has been calculated from the Building Society Association’s house price tracker survey in which respondents are asked how they feel the value of property will change.
