House prices 'to reach £200k by end of 2008'

The average UK house price is set to reach £200,000 by the end of 2008, it has been predicted.

According to the Centre for Economics and Business Research (cebr), although Britain's housing market faces a difficult 18 months ahead of it, its medium-term outlook remains fair.

The organisation said that the latest evidence suggested a picture of a gradually slowing housing market, something that would be heightened by "an almost inevitable" interest rate rise in May.

However, even if house price growth slowed to less than two per cent per year, house prices would still reach the £200,000 mark by the end of 2008, cebr said, representing a doubling of the average house price in six years.

Moreover, the organisation said that the slowdown in the housing market would be likely to be a temporary one, which could be good news for property investors looking to stay in the sector in the long-term.

It stated: "We estimate that mortgage payments will remain less than 25 per cent of disposable income. Consequently, the outcome will be a temporary slowdown, not a crash."

Recent Association of Residential Letting Agents research discovered that on average, buy-to-let investors expect to keep their properties for almost 17 years.



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