House prices to rise by 5%?

House prices look set to rise by around five per cent in 2008, according to Assetz.

The firm has put forward its prediction following the publication of the Council of Mortgage Lenders' (CMLs') forecast for the new year, which put house price growth at just one per cent.

"To suggest that house prices will rise just one per cent in 2008 represents an overly cautious approach from the CML," said Stuart Law, chief executive of Assetz.

"With an anticipated period of lower interest rates and the credit crunch now receding, I would predict a more realistic house price increase of five per cent in 2008, given the continuing supply/demand imbalance," he added.

Mr Law went on to point out that he believes 2008 will be a bumper year for buy-to-let investors, who will benefit from an increased demand for rented accommodation.

"Rents are already rising strongly - ten per cent this year with the same expected in 2008, a sentiment which appears to be supported by both Rics (Royal Institution of Chartered Surveyors) and Arla (Association of Residential Lettings Agents)," he continued.

"With demand strong and investors able to secure some excellent new property deals, 2008 looks to be a prosperous year for the buy-to-let investor," concluded Mr Law.

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