Rics predicts stable market in 2008

The UK housing market is not about to experience a major price correction and property values will level out in the new year.

According to the Royal Institution of Chartered Surveyors (Rics), there will be some difficult periods in 2008 but high employment and a strong economy will support prices through these periods.

Rics also anticipates seeing the base rate of interest being cut to five per cent in the first six months of the year.

"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 from the organisation.

"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 added.