Housing market 'will stabilise'

The housing market will settle rather than see rapid growth over the course of the coming year, according to a property expert.

David Bexon, managing director of SmartNewHomes.com, predicted that the next 12 months will see house prices rise by between two and four per cent.

Mr Bexon commented: "In the long term I expect prices to stabilise rather than rise dramatically as we have previously seen, particularly with the government's aims to increase the number of homes to meet demand."

He added that the market suffered as a result of the banking crisis earlier this year, but said that 2008 will be more positive, especially for first-time buyers.

Mr Bexon said: "Developers will continue to use incentives, so the New Year is going to be a better time for first-time buyers, who will capitalise on flattened prices and extra incentives, combined with expected lower interest rates."

He predicted that the Bank of England is likely to bring down interest rates by 0.5 per cent over the course of the year.

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