Moneyadviceforu

UK House prices fell by £4,000 (2.1%) in January 2008 (Halifax), the average price falling to £191,275, down £9,806 (4.8%) from the August 2007 peak of £201,081.

The Market Oracle forecast as of August 2007 is for a fall in average house prices of 15% over two years to August 2009.

UK interest rates were cut yesterday by a further 0.25% taking interest rates down by 0.5% from its peak of 5.75% (Forecast December 2006), the cuts to date and further anticipated cuts during 2008 are being mistakenly taken by many market commentators, economists and large mortgage banks such as the Halifax to imply that UK House price inflation will be neutral during 2008.

Therefore this article illustrates why house price inflation will start going negative by April 2008.