2008 will see prices level out

Next year will be difficult but house prices should level out, according to the Royal Institution of Chartered Surveyors (Rics).

The organisation says that the global credit crunch will continue to affect the market in 2008 but has ruled out a major correction.

According to Rics, a strong economy and high employment figures will underpin the market and help to support prices during the difficult times ahead.

"2008 will prove a difficult year for the housing market, but with falls likely in the base rate, the housing market should be provided with a stable platform," said Simon Rubinsohn, Rics chief economist.

"The effect of the credit crunch will dissipate slowly meaning that those seeking to obtain finance in the first half of 2008 may struggle.

"However, the employment picture should remain firm throughout the year, helping to prevent significant numbers of repossessions and the subsequent influx of supply into the market. This should ensure that house price growth remains broadly flat over the course of the year," he continued.

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