The UK housing market has started showing signs of a change in sentiment following the run on Northern Rock bank during September and following on the heels of 5 rises in interest rates to 5.75%.

The IMF warned: "There remains the concern that the US experience might presage steep housing downturns in other countries that have also experienced a rapid rise in house prices, with associated risks for output growth."

UK house prices have more than tripled during the last 10 years to an average of £200,000. The market is primed for a slump the trigger for which is the credit crunch. The resulting slump is expected to lead to much lower growth during 2008 then government projections of 2.5%. The Market Oracle forecast is for growth of 1.4%.

UK Housing Market Forecast for 2008-09 - As of 22nd August 2007

UK House Prices to fall by 15% over two years, falling prices to be accompanied by cuts in UK interest rates. (22nd Aug 07), (1st May 07) (25th Sept 07)

By Nadeem Walayat
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Nadeem Walayat is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication. We present in-depth analysis from over 100 experienced analysts on a range of views of the probable direction of the financial markets. Thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

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