THE UK housing market has returned to a 1960s-like cycle of sustainable growth and made a sharp break from ''boom and bust'' according to the Halifax bank in its annual review of the housing market.
The bank said the stable 1960s pattern is likely to characterise the market into ''the early years of the new millennium''.
House prices are expected to rise by 5% in 1998 and 4% in 1999, and the bank expects mortgage rates (now 8.7%) to peak below 10%.
The Nationwide building society, meanwhile, reports that the market has ''come off the boil'' in the past three months as interest rate rises have taken effect.
The Nationwide said prices are 12.6% higher than a year ago, but expects a rise of no more than 7% next year. The Halifax review, however, said prices across the UK went up by 6% this year.
''At no point in 1997 did annual house price inflation in the UK exceed 7.2% - media reports of booming house prices across the UK were misleading,'' it said.
Regional disparities are expected to lessen in 1998 as the growth in London house prices slows to under 10% and the growth rate strengthens in northern regions of the UK.
The number of transactions reached 1.45 million last year, compared with 2.1 million in 1988 at the peak of the 1980s boom, and 1.1 million in 1995.
They are now expected to stabilise at 1.5 million over the next few years.
The recovery in the housing market has been fuelled by buoyant disposable income, helped, ironically this year, by the flotation and share distribution of the Halifax itself.
Real personal disposable income (RPDI) rose by more than 3% in both 1996 and 1997, in spite of the upward turn in the interest rate cycle, it reported.
The review continued: ''There are no signs of a return to boom and bust, and the signs of a London 'boomlet', apparent in 1997, based on City earnings and overseas buying, have not noticeably spilled over into other areas.''
Slower growth in the economy would lead to lower growth in RPDI, and a bigger supply of new housing on the market should reduce the impact of demand on prices, the review noted.
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