House market slams on the brakes
(18 January 2008)

The average property price rose by just 1.85 per cent last year, according to moneyextra.co.uk.

The financial website's study showed that this fell from a 7.44 increase in 2006.

The study also revealed that the average amount people applying for mortgages are borrowing has fallen by £965 to £142,427 in the past 12 months.

Robin Amlot, senior editor of Moneyextra.com, said: "It's now clear that the housing market has slammed on the brakes, the most optimistic outlook for house prices for 2008 would appear to be that they'll stand still but values are falling now and are likely to continue to do so - it's just a question of how far and how fast they'll fall."

Mr Amlot continued to say that this is not necessarily bad news in the long term as "the bubble had to burst at some point".

He added that the expected fall in interest rates should help people avoid negative equity.

Meanwhile, predictions from the Royal Institution of Chartered Surveyors are suggesting that house prices could fall my a fifth in 2008.