The housing market is heading for a soft landing with the rate of house price growth slowing over the next two years, the Council for Mortgage Lenders has predicted.

It also said this was good news for shared ownership schemes.

The CML鈥檚 optimistic prediction contrasts with more negative forecasts that have been common in the media. In particular, the Bank of England鈥檚 monetary policy officer, professor Steve Nickell, was recently reported as having said that the ratio of house prices to earnings is more than 30% above its long-term average. This means there is now a 鈥渟ignificant probability鈥� that house prices will fall 鈥渁t some stage鈥�.

But the CML said Nickell also argued it was 鈥渜uite possible鈥� there would be no fall, and it expects house prices to stay relatively stable.

Andrew Haywood, senior policy advisor at CML, said: 鈥淭he future for social housing schemes, such as shared ownerships, looks promising. If prices stay relatively stable it will be easier to access them; if income and loan servicing costs level out this will ease constraints. We have an optimistic long-term outlook.鈥�

Source

Housing Today