The Council of Mortgage Lenders (CML) has released its forecast for the housing and property markets for 2008, predicting a slower but steady year ahead. It believes that UK sale transactions will slow but should remain above 1 million and also suggests that interest rates will fall by three quarters of one percent.
In summary, the CML is forecasting:
- House prices to rise 7% in 2007 as a whole, and 1% in 2008
- Property sales to total 1.17 million in 2007 and 1.01 million in 2008
- Gross lending to reach £360 billion in 2007 and £340 billion in 2008
- Net lending to total £105 billion in 2007 and £90 billion in 2008
- The number of 3+ months arrears cases to reach 145,000 (1.22% of all mortgages) by the end of 2007 and 170,000 (1.42% of all mortgages) by the end of 2008
- The number of repossessions to total 30,000 (0.25% of all mortgages) in 2007 and 45,000 (0.38% of all mortgages) in 2008
- Base rates to end the year at 5.5% in 2007 and 5.0% in 2008.
The Director General of the Council of Mortgage Lenders, Michael Coogan, commented, “We expect a slower mortgage market next year, although by no means a stagnant one. Most borrowers will cope, but not everyone will escape unharmed from the effects of a slower market, so the government should make it a policy priority to overhaul the system of state support for home-owners, which has lagged pitifully behind the times."
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