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Property prices to fall 10 per cent next year
22 Dec 2008House prices will fall by a further 10 per cent next year and 70,000 people will lose their homes, a property website predicted today.
Hometrack said the average cost of a home has fallen by about nine per cent this year and it expects further drops of 10 per cent in 2009 and three per cent in 2010. But it added that while prices looked set to fall by 22 per cent from peak to trough, for homeowners, who tend to base the peak on what they think they could have put their home on the market for last year, the fall would feel more like 30 per cent.
The group said the projected drop in house prices next year would put affordability, in terms of average debt servicing costs, on a par with the lows of the early Nineties.
Richard Donnell, Hometrack's director of research, said: "The housing market saw a total reversal of fortunes in 2008 as homeowners faced a crisis of confidence after a decade of buoyant market conditions.
"The onset of the credit crunch acted as a catalyst for both volumes and prices, but structural factors have and will continue to play an important part in shaping the current downturn."
The group also forecasts that 70,000 people will have their home repossessed next year, slightly below the Council of Mortgage Lenders' forecast of 75,000 repossessions, both marginally lower than the 1991 record of 75,500.
Reader views (6)
Gross underestimate. More Likely 20-25% in view that: 10s of thousands will come off fixed rate mortgages, increased devorce statistics linked escalating high unemployment, and inevitable adding of probate properties. More fundamentally this country has been exposed for not being structured to creating tangible wealth, and geared to a benefits hand outs ethos. Till the UK creates real wealth in terms of providing globally tangible competative goods and services, there is no light at the end of the tunnel. Govt policy is geared to devaluing the currency to subsidise their voter base with fake money. Credibility in Govt i.o.u's ..i.e guilts to fund this is on the brink of a collapase of credability. House prices will likely continue to fall through 2010 and beyond, unless this country restores fundenentals of manufacturing, and slashes benefit support to the masses to create a real and valid work ethic, and drastically curbs corruption and over inflated bonus practices to CEOs in all industries.
- George Gee, Enfield Middx, 25/01/2009 09:05
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Great news, the people without a house can carry on struggling to raise a mortgage whilst all the these cheaper houses and flats fall into the hands of the buy to let investors who already own swathes of property and carry on getting richer. People like me can carry on paying huge amounts of rent, until the banks start lending again only the greedy piggy brigade will benefit.
- Dc, London, 23/12/2008 10:17
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Given that some other "expert" predicted 25% falls next year, is this the first sign of an economic upturn? Or is this prediction as arbitrary as the other one?
- Keith, Kings Cross, 22/12/2008 22:52
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Excellent but I think it will be more than 10 percent. At long last I will be buy a house without going into ridiculous debt. The wait will be worth it.
- Brian Fast, Sydney australia, 22/12/2008 22:26
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I bought my house in Chelsea in 1992 and at that time the "experts" said that as we were now living in a low interest rate era there would not be any price inflation in the future. That was the conceived wisdom of the time. Having heard that, I have absolutely no faith in what the "experts now say!!!
- William, London, 22/12/2008 20:56
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Hopefully Gordon Brown will be one of the 70,000 to lose their house when he loses the next election. If he has the courage to call one of course - he'll probably hang on until the bitter end just to keep his house!!
- Malcolm, London, 22/12/2008 16:58
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