UK housing enters the unknown

Posted: 21 Nov 2006 10:37:31 GMT

The UK housing market will see four per cent growth over 2007, Hometrack has claimed, but added that analysts are now effectively working in the dark

The UK housing market will see four per cent growth over 2007, Hometrack has claimed, but added that analysts are now effectively working in the dark.

The current range of conflicting factors influencing the market is unprecedented and nobody has any real way to measure the likelihood of any particular outcome, it said.

Nonetheless, the outlook is far from grim, said Hometrack research director Richard Donnell, with the sellers-market continuing to support house price growth.

"The housing market is moving into uncharted territory as we enter a period of low growth and lower turnover, a trend not seen since the 1950s," he said.

"The problem is that low levels of liquidity in what is an already illiquid market are likely to increase the short term volatility in house prices.

"This is likely to impact on asking prices more than underlying values." Rising interest rates and unemployment added further short term uncertainty, he added.

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