House price growth to keep slowing say experts

Friday, 20 July 2007 12:00 AM

House price growth will keep slowing for the rest of the year, experts are predicting.

Both Nationwide and Halifax are expecting annual house price growth to drop by around three to four percentage points by December.

The mortgage lenders' experts both predict around six per cent growth for 2007.

Halifax has revised its original forecast from four to six per cent, and Nationwide sees annual house price inflation reaching between six and seven per cent.

Nationwide's chief economist, Fionnuala Earley, explained: "We are confident that our original forecast published in December 2006 is still on track and we expect the rate of house price growth to fall from 11 per cent now to around the middle of the five to eight per cent range."

Similarly, Halifax's chief economist, Martin Ellis, commented: "Whilst house price growth was stronger than expected during the early months of 2007, there are now more signs that the market is slowing.

"We expect this trend to continue. House price inflation should ease over the second half of the year."

Halifax explains it changed its prediction after prices rose faster "than expected" from January to April.

The bank added its forecast of six per cent would represent one of the smallest annual inflation rates for the housing market since 1995 - which would be lower than the long-term average of eight per cent, based on house price growth since 1983.

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