Marginal price growth predicted for new year

It has been predicted that house prices will rise in 2008, albeit marginally.

Hometrack's director of research believes that a lack of supply will support prices in the new year.

Richard Donnell told BBC Radio Four's 'Money Box' programme that he expects growth to reach one per cent.

"We expect prices to be up by one per cent next year and the volume of property sales to be down 16 per cent," he told the show.

"A lot of people simply don't need to move. They are unsure where interest rates are going, what is happening in the mortgage market.

"When the market slows you get a drop off in transaction levels, but that lack of supply is providing a support to prices, so overall prices are likely to rise one per cent next year," added Mr Donnell.

Nationwide recently forecast that house price growth would be flat in 2008.

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