Housing expert says housebuilders could have even tougher times ahead before market corrects itself
Housing expert Roger Humber has warned the sector will take up to seven years to recover from the current crisis.
Humber, who is strategic policy adviser to the House Builders Association, added that the crisis could still deteriorate further.
So far the housing downturn has led to large players such as Persimmon abandoning work on a number of its sites and market speculation that Barratt will be forced into a right issue.
Humber said: "I believe we are looking at a three to seven year process before the market corrects itself. It took seven years for the housing market to recover in the 1990s and I think it will take a similar amount of time before we return to a sensible market."
He added: "The worse may not be behind us yet. We have to bear in mind that the long overdue correction to the housing market started last spring, before the credit crunch. That underlying slowdown got worse as inflationary pressures, on food among other things, increased while disposal income didn't. Then layered on top of that, we got the credit crunch."
"I think central banks can resolve the liquidity crisis within three years, but the other issues, particularly the unhealthy gap between house prices and income, will take longer to unravel."