2007 housing price growth sinks to 2%

A new review of housing prices revealed that total price growth for 2007 was only two per cent, making signs of a slowdown ever clearer and driving more and more people toward rental property.

Financial website Moneyextra.com revealed that the meagre rise compared poorly with the 7.44 per cent price inflation on housing in 2006, meaning that first-time buyers will be unlikely to risk investment in a property that could see only slow price growth.

The average property value searched for on Moneyextra.com's online comparison tools reached £227,529 last month, only £45 higher than November – while London prices remained well above average and kept capital residents looking for good rental deals.

Robin Amlot, senior editor of Moneyextra.com, said: "It's now clear that the housing market has slammed on the brakes.

"The most optimistic outlook for house prices for 2008 would appear to be that they'll stand still but values are falling now and are likely to continue to do so – it's just a question of how far and how fast they'll fall."

He added that the inevitable bursting of the property bubble and the price downturn would not necessarily spell bad news in the long run, provided that existing mortgage holders keep up payments – perhaps with the help of a predicted interest rate cut.

Published 18th January, 2008

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