16
Nov
House price growth 'to stall in 2008'
House price inflation will stall during 2008, according to
Nationwide's latest House Price Forecast.
The study predicts that in line with reduced growth in the economy
and tighter credit conditions, will combine to bring house price
inflation down from its current rate of 9.7 per cent to zero per
cent.
Fionnuala Earley, Nationwide’s chief economist, said:
"Momentum in the market is now fading, and a number of factors
suggest that house price inflation will drop from its current rate
of 9.7 per cent to 0 per cent by this time next year."
The prevailing economic conditions further underline the need for
the Bank of England to cut interest rates, Ms Earley
commented.
"As signalled in the November Inflation Report, this leaves room
for the Bank of England to reduce interest rates by the end of
2008.
"Such a cut would clearly be a relief to many homeowners, but rates
would still be higher than when they started rising in 2006."
