House prices to slowdown next year
The Nationwide Building Society has warned that house price growth could grind to a halt next year, stating that there will be a 'significant slowdown' in house price growth over 2008.
The current level of annual house price inflation stands at 9.7% but officials from Nationwide state that this could plummet to 0% by this time next year. The building society has said that a number of factors have led to this predicted slowdown, including lower demand for buy to let, lack of affordability, tighter lending criteria, and a slump in the economy.
Many surveys into house price growth have been carried out over recent months, and all have indicated that the housing market is cooling, and that it will continue to do so in the coming months. Nationwide officials expect there to be large variations in house price growth based on region over the next year. It is predicted that Scotland will fare best, with house price growth of 4% but that Northern Ireland will see house prices fall by 5% after several years of impressive house price growth.
The Chief Economist at Nationwide stated: "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. As we move into 2008, economic tailwinds are increasingly being replaced by headwinds."
She also commented on the expected cooling in the buy to let market, stating: "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."
Officials from the building society also feel that interest rate cuts, which are expected to come next year, could help to ease the impact on house price growth but are unlikely to make any significant difference.
27th November 2007
- Tenants better off than homeowners [27.11.07]
According to a recent survey the benefits of owning a home rather than renting have plummeted by 75% over the past twelve months, which means that in many of the country's regions tenants that are renting their home are actually better off than those that own their own home.
- Lenders may be raising mortgage rates [24.11.07]
A recent report has indicated that many lenders may be looking to raise their mortgage interest rates as a result of the turmoil that has been caused by the global credit crunch that has swept across the UK and other parts of the world.
- About HIPs [22.11.07]
Earlier on this year the government in the UK introduced HIPs, or Home Information Packs. These HIPs have to be provided by the vendor or agent for any home of three bedrooms or more that goes up for sale in England or Wales.
- Small rise in fixed rates over two years [22.11.07]
According to data from the Bank of England there was a marginal rise in interest rates on two year fixed rate mortgages last month.
- Be careful about home improvements [19.11.07]
According to some industry experts there may be in an increase in the number of people carrying out large scale home improvements over the coming months as a result of lower consumer interest in purchasing property and fewer properties coming onto the market.
- FSA fines broker [18.11.07]
The UK's financial regulator, the Financial Services Authority, recently decided to fine a mortgage broker dealing with equity release mortgages, claiming that it had found 'persistent record keeping failures and systems and controls deficiencies' during investigations into the firm.
- Building societies offer most of the best mortgage deals [17.11.07]
A recent report has claimed that the vast majority of affordable mortgages actually come from building societies rather than from banks, and as a result of this consumers thinking of taking out a mortgage are being advised to steer clear of banks when it comes to finding a low cost mortgage deal.