Scotland's Housing Market in 2008
Despite the downturn in house prices, the Royal Institute of Chartered Surveyors has predicted that any drop in Scottish real estate prices will not endure.
Furthermore, the Bank of England is likely to reduce interest rates further to 5% in order to counter any liquidity problems and to provide stability in the financial sector.
Some first time buyers currently limited by high house prices in Scotland will capitalise quickly on any downturn in the market, which will provide a regenerative boost.
For the first time in several years, the beginning of 2008 may see Scotland's real estate market actually favouring the buyer.
Scotland's real estate market
Halifax have forecasted that on the whole, UK house prices will remain flat in 2008, with variations in some regions. Scotland is expected to see a modest rise in the housing market in 2008, along with southern England. Other parts of the UK are expected to see a small reduction in house prices.Any fears created by a potential fall in house prices should be considered in context; the massive rise in the housing market in recent years could not continue forever and so the current cooling of the market is an expected effect of so much sustained growth.
'Sound economic fundamentals' forecast to support Scotland's housing market in 2008
According to the Halifax, Scotland and the UK as a whole have 'sound economic fundamentals', such as high employment, which will continue to support house prices at current levels and rebuff any significant downturn. Indeed, the UK has seen its 65th successive quarter of GDP growth in Q4 of 2007, which amounts to the longest sustained period of growth in this country on record.Although financial systems elsewhere in the world are creaking under the strain of the credit crunch, the Halifax predicts that the Monetary Policy Committee of the Bank of England will cut interest rates twice in the course of 2008, which should stabilise any sharp downturn in the economy and help prevent the housing market from crashing.
As at January 2008, the average price of a UK house was £192,244, a 4.5% increase on one year earlier. The average annual change for Scotland has been +13.1%, with an average house price in Scotland of $144,897 (source: Halifax). Scotland is continuing to see growth, and while the market is predicted to slow in 2008, Scotland's cheaper housing market will ensure it continues to be an attractive destination for buyers, which should in turn maintain the market through any downturn.
