House Price Growth to Halve Next Year
The mortgage lender, Nationwide, expects house price growth to roughly halve next year as the global credit crunch exacerbates a rise in mortgage rates.Nationwide group economist Fionnuala Earley expects house price inflation to slow to around 3% in 2008, down from a projected 7% in December this year.
The anticipated decline partly reflects an abrupt tightening of credit market conditions this summer, triggered by fears over rising defaults against sub-prime mortgages in the US.
Analysts say the credit crunch, which last week forced UK mortgage lender Northern Rock to seek emergency funding from the Bank of England, will force all mortgage providers to raise their rates as they pass on generally higher borrowing costs to their customers.
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