Total fall from 2007 peak of market to 2011 will be 30%, forecasts poll of analysts
House prices will fall a further 11% this year, a poll of analysts has shown,
The research, carried out by Reuters, suggests the market will not recover until 2011, with house prices falling a further 3% next year. They crashed 16% in 2008.
The 37 UK analysts surveyed by Reuters suggested that rapidly rising unemployment and a shortage of mortgage credit to new buyers will drive the continuing price falls.
“Unemployment is going to soar in the course of this year and it's going to increase into the first quarter or even into the second quarter of 2010,” said Matthew Sharratt, economist with Bank of America. “The housing market is going to see a tough year - even in 2010.”
If the bulk of the analysts are right, by the time that house prices bottom out they will have fallen one-third from their peak in 2007.
Four of those surveyed were even more bearish, prediction an overall fall of 40% in house price.
A 30% house price fall would knock £60,000 off the price of a median dwelling.