Market will not crash

The Royal Institution of Chartered Surveyors (Rics) says that the UK housing market is slowing down but will not crash.

It has published its housing market survey for October and revealed that 22.2 per cent more chartered surveyors reported a fall rather than a rise in house prices in the month.

Despite this, the organisation remains confident that the market is being supported by solid fundamentals and does not anticipate a major correction.

"The housing market is seeing the awaited slowdown that many had been expecting, with modest falls reported across most UK regions," said Ian Perry from Rics.

"A decline in transactions may be in the offing as stalemate returns to the market, although a material fall in prices would require a weaker labour market prompting forced sales," he continued.

High interest rates are thought to be one factor behind the slowing market but most analysts predict that the base rate of interest will be cut early in 2008.

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