House prices 'to correct' over three years
Published On 4 January 2008
Over the coming three years, the housing market in the UK will correct itself by around 35 per cent, according to one industry insider.Paul Holmes, chief executive of Firstrung, said that his "finger in the air view" was that property prices will correct by one per cent a month for three years.
"Unfortunately, that's not looking to be a smooth transition," he said. "The short-term trend for property now will be a correction to come back in line with affordability."
Recent figures from the Land Registry revealed, however, that during November house prices were broadly stable rising by 0.6 per cent for the month. Annual house price inflation remained at 8.1 per cent.
Mr Holmes added that the fact house prices will start to fall "is not worth debating" as it is in his view a certainty.
What this will mean for the wider market in the long-run rests on affordability. "Now all the cheap credit has been stripped from the market, there is now only one fundamental that is going to underpin this market, and that is what people can afford," he said.
