CML predicts 2008 house price fall of 7%
by Gill Montia
The Council of Mortgage Lenders (CML) has revised its forecast for UK house prices and is predicting a 7% fall in values this year, as opposed to a 1% rise (October 2007).
During the months of March and April, mortgage lending fell by 16% year-on-year as the market continued to shrink and lenders upped their deposit requirements for their most attractive loans.
The CML’s director general, Michael Coogan, is warning that the decline will continue until conditions on the money markets improve.
As a result, gross lending for 2008 could be in the region of £285 billion, a 21% decrease on 2007.
The Council also expects transactions to decline by 35% in 2008, to around 770,000.
According to the CML, borrowers coming to the end of fixed-rate deals are coping well with the payments shock of remortgaging but the Council still expects the number of mortgages three months in arrears or more to increase to 170,000 by the year-end, from 129,800 at the beginning of 2007.
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