Price growth to reach 3.5%

House price growth may reach 3.5 per cent in the new year, according to the County Homesearch Company (CHC).

In addition, the firm anticipates that the base rate of interest will be cut three times in 2008.

"I would expect to see moderate growth in 2008, with UK house prices increasing 1.5 per cent by June, finishing on 3.5 per cent by the end of the year," said Jonathan Haward from the CHC.

"This will be led by a significant tightening in lending criteria and reduced bonus spending, which will pour some much needed cold water onto what has been an overheated property market.

"As 2008 draws to a close, I would expect the Bank of England to make a third interest rate cut, following earlier, anticipated cuts in first and second quarters of the year," he continued.

Nationwide recently revealed that it expects house price growth to fall to zero per cent in 2008.

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