This is even though inflation figures are beginning to creep up again - putting the Bank of England's 2 per cent target in jeopardy and pointing towards a rate freeze at 5.5 per cent for the foreseeable future.
The company has also said that house prices will increase between 1 per cent and 2 per cent in 2008, a somewhat conservative view when considering the predictions of 3-5 per cent which have been banded around. However growth of around this level is believed to be the most likely outcome of the coming twelve months.
Robert Bryant-Pearson, chief executive of Allied Surveyors said: “There will be very little growth in house prices next year with adjustment in certain locations and types of property combined with a decline in the price of one and two bedroom apartments which are currently making up large percentages of city centre property types. We are already beginning to see that decline now."
This reduction in price of smaller properties is likely to be driven by an easing off of first-time buyers. This is unfortunately not due to lack of demand, if anything demand will continue to strengthen, instead it will be an issue of obtaining funds for their purchase.
Bryant-Pearson also added: “We expect poorer housing stock and former local authority housing to be the most vulnerable. Whilst some lenders are predicting little or no overall change in house prices for 2008, this masks the fact that there will be certain sectors that will see a decline whilst others such as well located family homes in the middle market will continue to enjoy healthy demand.
“The Bank of England’s continued prudent touch on the tiller of interest rates and an expected narrowing of the Libor differential in January should ease recent fears: thankfully there is room to manoeuvre. We have been witnessing a blip, not the first wave of a disaster.”
