Mortgage and housing predictions ''require realism''


Wed 7th Nov, 12:21:10 GMT

People need to be realistic about the future of the housing and mortgage markets, according to the Intermediary Mortgage Lenders Association (IMLA).

In recent weeks, a number of financial and property experts have made their predications about what 2008 will bring in terms of house prices and mortgage rates, with most predicting the market will continue to slow into next year.

Peter Williams, the executive director of the IMLA said that according to the most optimistic forecasts, "prices would be virtually flat in real terms" but stressed that there are many variables that may affect house prices.

"House price inflation will, as always, be uneven across the country, so though we can expect properties in good locations still to increase in value - both actual and real terms- there may be localised falls," he said, adding that only those who have "bought at the top of the market" are likely to be seriously affected.

He predicted both the housing and mortgage markets would remain flat but suggested that the Bank of England could step in and cut rates if "the market correction gathers pace in the way some pundits suggest".

According to a new report released by PricewaterhouseCoopers, despite the forecast slowdown, there is only a 20 per cent chance that the housing market will crash.ADNFCR-1143-ID-18346164-ADNFCR


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