Find out what is going to happen in the UK Property market in 2008.

The aim of this UK property predications article is to give the property investor or the average home owner an in depth insight into what might happen in the UK property market in 2008.

Firstly let's take a look at what happened in 2007 and the early part of 2008.

The debacle of what happen in the subprime mortgage crisis sent a shock wave through the financial World. There were many causalities, probably the most notable to date in the UK is Northern Rock.

Any business that relies heavily on debt and borrowed money has been hit hard. Banks and financial institutions are tightening the purse strings and property investors are feeling the squeeze and many are nervously looking at other ways to reduce the risks in their portfolio. Investors are particularly nervous if they are coming to the end of any fixed term mortgage agreements.

There is a good chance new mortgage rates will not be as favourable, hence potentially taking thousands of pounds out of the investors pocket.

Are we on the road to another recession?

Many people are looking at the property market crash of the 1990's and are wondering if we are heading down the same route now.

The bottom line is that there is always a chance we could be going down that same path; however, the likelihood of this happening today is currently very slim. The reason we are unlikely to be heading towards another property market crash is because there where two major contributing factors that helped bring down the property market in the 1990's that don't currently exist for us today, these are:

1. Unemployment was sharply on the rise.

2. At their peak, interest rates were almost 15%

How is capital growth going to be affected this year?

All indication are that property prices this year will be much flatter than they have been for a long time. Indeed we are beginning to see sequential months of the average property prices in the UK actually going down.

However, locations such as Scotland and London are still bucking this trend. For short-term capital growth there are no real safe bets at the moment, but the safest of what is on offer tends to be in Scotland and down south in places like London.

Nonetheless, there are still location in the UK that are potentially undervalued and should still see a slow but steady price increase this year.

What are the facts?

While the media is predicting negative equity and zero percent price rises this year, the truth is nobody really knows what the future holds.

However, when it comes to UK property predictions, history does prove one thing. Time and time again the media are using pure guess work when it comes to the property market and they more often than not, get it wrong. The job of journalists and reports is to sell newspapers or get people to watch them on TV. Unfortunately, often times this means sensationalising stories which in the end, end up having little resemblance to solid facts.

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