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Nationwide Says Healthy Property Market - Evening Standard Mar 08

Economists expect house prices to fall around 5 per cent this year, although Nationwide today predicted no change at all.

It forecast "slower economic growth rather than recession".

Fionnuala Earley, chief economist at Nationwide said: "The trend in prices is clearly weakening, but the size of the drop in the annual rate between January and February perhaps overstates the rate of cooling as it partly reflects the particularly strong increase in prices in February last year.

"Overall it seems clear that we will not see recent rates of growth. There is currently an unprecedented amount of uncertainty about future economic conditions, but if the Bank of England's central projection that the economy continues to grow is correct, condition for the UK housing market are perhaps less gloomy than some would have us believe."

The Bank meets next week to set interest rates, but is unlikely to make further cuts. Earley said: "The performance of the economy is highly relevant for the fortunes of the housing market. So while there are several factors which are slowing housing demand, the fact that a recession in the UK seems unlikely provides support for the overall health of the market."