16 Nov

House price growth 'to stall in 2008'

House price growth 'to stall in 2008'

House price inflation will stall during 2008, according to Nationwide's latest House Price Forecast.

The study predicts that in line with reduced growth in the economy and tighter credit conditions, will combine to bring house price inflation down from its current rate of 9.7 per cent to zero per cent.

Fionnuala Earley, Nationwide’s chief economist, said: "Momentum in the market is now fading, and a number of factors suggest that house price inflation will drop from its current rate of 9.7 per cent to 0 per cent by this time next year."

The prevailing economic conditions further underline the need for the Bank of England to cut interest rates, Ms Earley commented.

"As signalled in the November Inflation Report, this leaves room for the Bank of England to reduce interest rates by the end of 2008.

"Such a cut would clearly be a relief to many homeowners, but rates would still be higher than when they started rising in 2006."

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