Possible £40,000 fall in house prices by end of 2009
November 19, 2008
According to recent figures house prices could fall by as much as £40,000 by the end of 2009. The figures indicated that compared to the peak of last October the average house price could fall by around 20% by the end of December next year, and this would mean that property prices were back down to the same level as 2004. The data comes from the Centre for Economics and Business Research (CEBR), which has predicted that it will take until 2010 for the housing market to show any signs of stability.
The Centre for Economics and Business Research (CEBR) has said, however, that in 2011 and 2012 house prices will boom again, so many of those that fall into negative equity over the next couple of years could find that they regain their equity levels further on down the line. However, officials from CEBR predict that the average house price in the meantime will fall from £196,000 in 2007 to £157,000 by December of next year.
One official from the CEBR said: ‘Confidence in the housing market has been shattered as lack of mortgage availability has left few sellers chasing even fewer buyers, and expectations of falling prices have become embedded. Now that the financial crisis turns into an economic crisis with rising unemployment and falling household incomes, we could see house price falls starting to accelerate again.’
He added: ‘However this will to some extent be offset by aggressive cuts in interest rates, at least some of which will be passed on to homebuyers, combined with a gradual relaxation in mortgage availability as the impact of the banking rescue package kicks in.’
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