The rules are still the same

Despite all the recent publicity given to house prices and the possible effects of the 'Credit Crunch', the underlying state of the housing market is still stable, as Andrew Bush, managing director of Bush Property Services, explains.

"It's hard to open a paper or switch on the radio these days without hearing various prognostications about the future of the market and the likely impact of this 'Credit Crunch'," say Mr Bush.

"The fact is that as long as buyers and sellers stick to some basic principles, problems should be avoided."

Mr Bush's words come on the back of a report from a respected financial institution and a speech from an influential economist, both of which suggest that the recent difficulties in America shouldn't have an effect on long-term stability over here.

In its latest report, Ernst & Young's Item Club 'does not expect (the crunch) to lead to serious correction in house prices'. And in a speech to the Institute of Chartered Accountants, Kate Barker, a member of the Monetary Policy Committee, which sets interest rates, said, "[It] is not clear why recent events should prove a trigger which significantly alters previous expectations of continued robust house price growth."

"The fact is that house prices in this country are still relatively stable. This means that for a first-time buyer, the circumstances in which they are purchasing are unlikely to change dramatically over the next year to 18 months. If anything, I would expect prices to nudge slightly higher, although there is no question that the recent growth spurt has largely died away.

"Equally, for those who are already in a property and thinking of moving, the relative value of your property against the one you're moving to hasn't changed. Given that if the value of your house rises or falls, so will the one you're buying, the state of the market shouldn't impact hugely on your decision.

"And don't forget that bricks and mortar is a long term investment. Almost without exception, it's still better to buy than to rent. Provided that people don't borrow more than they can afford and stick to their limits, there's no reason why, individually and nationally, the market shouldn't continue to flourish."