Press Release Summary: The extent to which recent predictions for the fortunes of the UK property market in 2008 have cast a shadow of gloom may seem disheartening for many
Press Release Body: The extent to which recent predictions for the fortunes of the UK property market in 2008 have cast a shadow of gloom may seem disheartening for many, be they aspiring buyers, new investors in buy-to-let or those considering an expansion of their portfolio.
Yet time and again there are both commentators willing to swim against the tide by predicting that the negative forecasts will prove to be unfounded and that, while the boom times of the last few years may be over, that by no means implies bust is inevitable - or even likely.
An example of this has come in the response to Grant Thornton\'s forecast that house prices will fall to below their August 2007 value by up to ten per cent, or £20,000 on average. Disputing the idea that properties in Wales, for example, could fall in this way, estate agents John Francis and Knight Frank both predicted a one-to-three per cent rise in prices, while Thomas George in Cardiff predicted three to four per cent inflation, Landlord Expert reported.
In addition to this, hard evidence of current trends also serves up the occasional contradiction to received wisdom. Several recent house price surveys have shown price falls, but the Land Registry figures for November, published today, show an overall increase of 0.6 per cent for England and Wales during the month, with an annual increase of 8.1 per cent. The Welsh dissenters may feel more justified in their upbeat forecasts for the future as Wales saw a 0.7 per cent rise, topped only by London on 1.1 per cent and the West Midlands on one per cent. Moreover, all but two regions saw growth, these being the east Midlands which was unchanged and the north-east which saw a 0.9 per cent fall.
Of course, the Land Registry figures do lag behind some surveys, but against that the survey does not include Scotland, widely agreed to be one of, if not the best, prospect for house price growth in 2008.
If predictions about the residential housing market may be taken with a pinch of salt, the same may be said of buy-to-let. This sector has attracted many warnings of bad times ahead, but Fionnuala Earley, chief economist for Nationwide, disagrees. Speaking to the Times, she predicted that the market would be sustained both by interest rate cuts and continued high demand.
She said: \"We are in a market where there is great tenant demand because first-time buyers are unable to get on to the housing ladder.\"
Late last year Ms Earley predicted that house price growth for 2008 would be flat overall. This may turn out to be an inspired prediction, should it be the case that in the end all the potential factors which lead some to predict growth and others to forecast a slump conspire to cancel each other out. Perhaps this will also be true of buy-to-let. While a lack of price appreciation may not help some, rental increases and high demand caused by the very same slowdown could keep the market in a far more stable state than the doom-mongers have suggested.
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