BRITAIN’s housing market will not crash, despite the prospect of a slowdown in the economy next year, according to the Ernst & Young Item Club’s new forecast for the economy.
Its forecast, using the Treasury’s model of the economy, predicts that the credit squeeze will slow the economy to 2.1% growth next year down from 2.5% in its June forecast compared with an annual growth rate of 3.3% in the third quarter.
But it takes issue with the International Monetary Fund, which last week warned that UK house prices could be heading for a significant fall.
“Item does not believe that the tighter lending conditions for homebuyers will lead to a serious correction in UK house prices,” the report says. “With the labour