House prices will not fall

Posted: 03 Aug 2007 11:19:40 GMT

The UK property market is not likely to see prices fall in 2008, according to the latest forecast.

The UK property market is not likely to see prices fall in 2008, according to the latest forecast.

Savills has released its predictions for next year, detailing that it believes prices will continue to slow but a drop in prices is not on the cards.

The effects of the recent interest rate rises are due to be a key factor and the firm believes that the slowdown currently being experienced will not materialise into a drop.

"Current interest levels are impacting on affordability, however as long as there remains a reasonable prospect for rates to drop below their current levels by the end of next year, we do not predict falls in average UK house prices," commented Lucian Cook from Savills.

"We believe that we are currently witnessing the beginning of a slowdown similar in nature to that of 2004/05, when the number of transactions reduced significantly and house price growth stalled.

"Unless there is a conspiracy of factors which significantly erode market confidence, we expect the market to respond by slowing for a period, allowing households to rebuild their monthly finances," he added.

Savills is sticking to its forecast of house price growth in 2007 being seven per cent and predicts that 2008 will see a slightly reduced level of growth at five per cent.

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