John Charcol makes 2008 predictions
Mortgage broker John Charcol has predicted that property transactions will fall by 15 per cent in 2008 and gross mortgage lending will fall from £360bn to £320bn.
It also believes that bank rate will fall to 5 per cent by the mid-year and there will be a small fall of 2 per cent in house prices.
“A lot will depend on how the liquidity squeeze develops and so far the actions of the Bank of England don’t instil much confidence, although it is difficult to judge how much their strings are being pulled by the Government.”
Boulger adds that housing transactions have fallen by at least 25 per cent since the summer and also compared to this time last year. He believes the introduction of Home Information Packs have definitely distorted the market in the second half of the year and may be partly responsible for the slowdown, with sellers seeing them as a pointless additional cost and most buyers ignoring them.
He adds: “I predict the net result is that house prices will fall a little in the first half of the year - by up to 5 per cent - but by June the fall in Bank Rate and an easing of the liquidity squeeze will stabilise the market, although it will still be very difficult for sub-prime borrowers. In the second half of the year transaction levels will improve and prices will partly recover, ending the year down 2 per cent. As usual there will significant regional variations and also new-build flats in some city centres will continue to under perform in view of the over supply of this type of property as a result of the Government’s planning policy.”