House price fears
HOUSE prices will fall by 40% from their peak in 2007 unless Government action succeeds in boosting mortgage lending, it was warned today.
The centre for economics and business research said house prices would fall by a record amount in 2009 unless there was an improvement in lending conditions. The independent consultancy group predicts prices will drop by 32% from their peak in the third quarter of 2007 to their trough in the first three months of 2010, if the Government’s banking bailout leads to a modest improvement in mortgage approvals from around 32,000 a month now to 50,000 a month in 2010.
But if the Government’s action fails to stimulate this pick up, house prices could fall by a further 25% from their current level, meaning a total drop of 40% since they first began to slide in 2007. The property market would then stagnate throughout 2010 and 2011, and house prices would remain below their 2003 levels until 2013.
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