| 2008 is shaping up to be an interesting year for the | | | | since, the majority of people who didn't get into a |
| property market. | | | | fixed deal at the right time are paying a lot more for |
| Already January has seen a small decline. Figures out | | | | their monthly mortgage payment than they were |
| last week from the Nationwide building society | | | | two years ago. That lack of disposable income is |
| showed that house prices fell by 0.1 per cent. | | | | bound to have an effect on people's willingness to |
| And with yesterday's interest rate cut making | | | | buy bigger property, increasing their mortgage |
| mortgages more affordable for thousands of people, | | | | payments again. |
| who knows what will happen over the next 11 | | | | And of course there was a slowdown in house price |
| months. | | | | growth last year. It seems as though the effect of |
| Of course this year is following a very unusual one | | | | that is continuing into 2008. |
| for the property market in 2007. It started with the | | | | The Nationwide's monthly price survey of the |
| introduction of Home Information Packs, which you | | | | property market for January showed the 0.1% fall |
| probably know as Hips. | | | | was the third consecutive monthly fall in average |
| They were brought in after some research in 1997 | | | | property prices. They went down 0.5% in December |
| showed that one in four of all house sales fell apart | | | | and 0.8% in November. |
| before contracts could be exchanged. They were | | | | The decline has seen annual house price growth fall |
| formally announced four years ago and phased in | | | | back to 4.2%, which is not only the lowest figure for |
| over a number of months last year. | | | | 13 months, but is down from 4.8 per cent in |
| For anyone who hasn't dived into the property | | | | December 2007. |
| market and sold their house for a few years, they | | | | And it means that the average price of a property in |
| will have to get used to paying for a Hip to be | | | | the UK now stands at £180,473. |
| compiled. It has to contain a number of documents, | | | | The Nationwide, which has been issuing monthly |
| all less than three months old. They include a | | | | house price indexes for 13 years now, puts these |
| statement of sale, energy performance certificate, | | | | changes into perspective. It says that despite the |
| local authority searches and of course the title | | | | three falls in a row, the price of a typical property is |
| documents for the property. | | | | still 4.2% higher than it was 12 months ago. |
| The effect Hips had last year was to pile on a little | | | | The building society will be keeping a close eye on |
| more expense to the process of selling a house. | | | | how the recent interest rate cuts and any more in |
| Some property consultants believed that restricted | | | | the months to come will affect the market. It's |
| the supply of houses to the market a little, as people | | | | possible that lower rates will attract buyers in |
| who would once have speculatively put their house | | | | creating more demand. The key will be if the demand |
| up for sale to see if they got any bites would be less | | | | turns into actual house price transactions. |
| likely to do this. | | | | So what will happen to the property market |
| Another key factor that affected the property | | | | throughout the rest of 2008? It's a tough one to call |
| market in 2007 was interest rate rises. Between | | | | right now. One thing's for certain - it looks like we |
| August 2006 and November last year, there were | | | | may have a year as eventful as the last one. |
| five rate rises. Even though they have dropped twice | | | | |