The NAEA has said that whilst the market strives to right itself, there are a number of underlying factors - namely the support from robust supply and demand - which will help it repair.
"At a very basic level, if supply is limited and demand is high then prices will remain stable or rise," said Peter Bolton-King, chief executive of the NAEA.
"We know that supply is a problem for the UK – a fact highlighted by the government recently as it revised its house building targets upwards. Similarly, we know demand will continue to increase. The population is rapidly growing and at the same time the number of single person households is also on the rise.
"While the market may have been asked to weather some considerable storms recently, the basic supply and demand dynamic is what will help to keep it steady in the long term.”
The NAEA sees the picture in 2008 looking toned down but largely similar to that of 2007 - namely manifested in marked regional variations in house prices.
London and the South East will remain strong, whilst areas suffering from lower employment are likely to see prices plateau or perhaps even depreciate over the coming year.
Bolton-King commented: “Further decreases in the base rate are expected for early 2008 when we may see another quarter percentage point fall. We are unlikely to experience another drop after that, however, until much later in the year. I would be pleasantly surprised if the rate was as low as 5 per cent by the close of 2008.
“While we expect to see a much more subdued picture in 2008, the underlying strengths remain the same and we are hopefully that these will help the market to weather adversity over the coming year.”
