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2008 Property Market Outlook - Articles Surfing
Considerable uncertainty is the phrase that best sums up the 2008 property market outlook. There's no doubt that the rippling effect of the lending crisis that started in the U.S. is now being felt in the U.K. property market and with it, the uncertainty.
When asked about the 2008 market outlook, expert opinions vary. Trying to predict the housing market has always been tricky and most economists tend to err on the side of conservatism. Having said that, here's what is forecast for the property market during 2008.
House Price Growth
Slow to flat growth in housing prices is expected and in fact some experts foresee price growth declining as homeowners already have begun lowering prices in an effort to sell. Of course, the direction prices head is very much dependent upon the region. However, one aspect everyone agrees on is that the days of double-digit property price growth are over.
The general consensus is that by year's end, the interest rate will be down to 5%. While lower interest rates have traditionally been good news for the property market, lenders are weary and will continue to limit their exposure to risk. And that means more prospective homebuyers and homeowners looking to renew their mortgages will have their applications turned down than approved.
Increased Costs of Other Goods
The continued cost increase of other goods such as food, petrol, energy, council tax bills and more will play a significant role in property market during 2008. These higher costs combined with salaries that aren't rising nearly as fast and higher personal debt will make it increasingly difficult for home buyers to afford their monthly mortgages. Higher costs will also make it difficult for first time buyers to save the 20% deposit and associated buying costs most lenders now require.
Repossessions are expected to continue increasing, perhaps as high at 45,000 at year's end as the average mortgage increases '200/month; an increase many homeowners won't be able to afford.
The Subprime Market
There is one aspect of the 2008 property market that all the experts agree on and it has to do with the individuals who make up the 'sub-prime' sector. With lending standards continually tightening, those within this category will find it extremely difficult to renew their mortgages into more favourable terms. And those with less that stellar credit not currently holding mortgages may find fewer mortgage options than had been available previously due to the tightening of lending standards.
Now for the Good News!
First time property buyers with adequate savings and excellent credit will be in a position to take maximum advantage of the housing market changes anticipated during 2008. These buyers will be able to negotiate some excellent deals, especially with property owners who need to sell their homes quickly.
Copyright © 1995 - Photius Coutsoukis (All Rights Reserved).
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