IMLA has stated that many 2008 forecasts did not take into account the fact that house prices were currently ‘balancing on a knife edge’. Both Savills and Knight Frank forecast 3 per cent growth, while Hometrack suggested 1 per cent growth.
ITEM Club expected prices to stall and Nationwide also expected the market to slow.
IMLA suggested there would be a significant pick up in arrears and possessions in 2007’s full year figures, with lenders’ forecasts higher for 2008 than the previous two years, despite the current pressure.
IMLA executive director, Peter Williams, said: “We can see that even the most upbeat commentator expects prices to rise by no more than 3 per cent on average, broadly in line with inflation – so in real terms prices would be virtually flat.
“Other opinions suggest that we may see a fall in real property values. The fact remains that house price inflation will, as always, be uneven across the country. Though we can expect properties in good locations to increase in value, both actual and real terms, there may be localised falls. In reality, only someone who has bought at the top of the market will be significantly impacted by this market slowdown.”
Sue Anderson, head of member and external relations at the Council of Mortgage Lenders, said: “There are as many forecasts around as forecasters and it is difficult to focus too far ahead. You have to accept that forecasts are just that.”
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