Housing Market News And Views House Price Predictions For 2008

Date Published:

28/05/2008

Are You In A Hotspot?

The general consensus is that Scotland, and southern England, in particular London and Kent, will be the best performers in 2008. Conversely Northern Ireland, which had the highest price growth in the UK in 2007, is predicted to experience the biggest slowdown this year.

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Colin Kemp, managing director at Halifax Estate Agents, said: 'Regionally, southern England and Scotland are likely to record the highest house price growth during 2008. Worsening affordability and weakening economies will cause a modest fall in prices in northern England and the Midlands.'

House Prices In East London

'Parts of East London, such as Hackney, are likely to be one of the top house price performers in 2008 as regeneration ahead of the 2012 Olympics attracts buyers. House prices are also likely to be boosted in areas close to the planned Crossrail line in London.'

House Prices In Kent

'Kent generally is likely to outperform the South East average, partly due to infrastructure improvements. Chatham and the other Medway towns in Kent are likely to record significant house price increases as demand is boosted by the planned opening of high-speed commuter services from central London to north and east Kent in late 2009.'

House Prices In Scotland

In Scotland, Halifax claims towns with good transport links into Glasgow or Edinburgh, such as Lochgelly, Paisley and Greenock, are forecast to have the strongest house price growth. Aberdeenshire is also predicted to see continued property price growth in 2008.

Fionnuala Earley, Nationwide's chief economist, said: 'We believe the strongest performance in 2008 will be Scotland, where prices are expected to rise by four per cent. The house price to earnings ratio in Scotland is lower than anywhere else in the UK, showing that affordability has not worsened to the same extent as in other regions.'

'Scotland has not participated as strongly in past house price boom cycles, and this probably makes it somewhat less vulnerable to weaker conditions in the UK market as a whole. Moreover, the strength of oil prices is likely to benefit specific local markets with exposure to the sector, such as Aberdeen.'

House Prices In Northern Ireland

At the other end of the affordability spectrum, Northern Ireland has quickly become the least affordable UK region for first-time buyers. This is due mostly to the phenomenal house price growth that the Province saw in 2007. At the end of the third quarter, prices were up by over 40 per cent year-on-year. Our forecast is currently for a five per cent decline in 2008.'

Elsewhere in England and Wales, prices are likely to be weakest in the northern regions, where minor falls are expected. Supply shortages are generally less severe in the northern regions, and it follows that weaker demand conditions are likely to have more of an impact on prices.'