RICS: No housing crash in 2008

Home surveyors across the UK believe there will no housing crash next year…

In its latest report, the Royal Institution of Chartered Surveyors admits it will be a “difficult” 12 months. But it forecasts that any drop in prices will not last long. This goes against a number of other polls, which have said homeowners will see the value of their properties slide.

The latest RICS survey shows members have mixed views on which way the property market will go next year. Most expect prices to be generally flat in 2008 but they do accept that the market could experience some near-term weakness.

Difficult year ahead

Simon Rubinsohn of RICS said: “2008 will prove a difficult year for the housing market, but with falls likely in the base rate, it should be provided with a stable platform. The effect of the credit crunch will dissipate slowly meaning that those seeking to obtain finance in the first half of 2008 may struggle.

“However, the employment picture should remain firm throughout the year, helping to prevent significant numbers of repossessions and the subsequent influx of supply into the market. This should ensure that house price growth remains broadly flat over the course of the year.”

Earlier this month, the Bank of England cut the interest rate by 0.25% to 5.5% as economic growth slowed down. While property prices are not within its remit, the BoE later confirmed that it had taken the situation into consideration when lowering the cost of borrowing.