I have recently read the RICS (Royal Institute of Chartered Surveyors) property forecast for 2008 – interesting reading I thought.

Although there is at present a “credit-crunch” within the finance sector – I feel in the next 3-6 months, once its full extent has been fully understood, it will be yesterday’s news.

Interest rates are set to fall possibly to less than 5% (SWAP rates confirm this trend), there is a shortage of housing in the UK  and the general economic outlook is robust. Although the next 12 months will be more challenging, there are numerous opportunities that will surface. Rents are rising so the effect of lower interest rates and higher rents create a “Golden Scenario” for property investors.

First Time Buyers are showing a strong pent up demand which provides a great support for the overall property market.

Recent surveys by Mortgage Express have indicated that over 40% of landlords are looking to expand their property portfolios in 2008.

My main criticism is of the popular UK press and their doom-monger journalists who have been so contrary in predicting a housing price crash for the last 5 years. Yes, it does sell papers but does nothing to create wealth for anyone.

In the longer term if prices should stall or fall slightly what do you think will happen to rental demand? Derrrrrrrrrrrrr – Go UP!!

My predictions for 2008 are – property prices will increase by around 3%, interest rates to 5% (or better) and rents will increase by 5-7%.

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