MPs advised house price falls will bottom out at 20%

| October 15, 2008 | 0 Comments
MPs advised house price falls will bottom out at 20%

A Professor of Finance from Imperial College Business School in London is predicting that UK house prices could fall by a further 5% to 10% before the market bottoms out.

Addressing a committee of MP’s, Professor David Miles proposed that the property market should stabilise once house prices are 20% below their peak of summer 2007.

Once this point has been reached, the professor expects a sharp rise in the number of property transactions.

Commenting on the current situation, Professor Miles described trends in the housing market as being driven by people’s expectations of further house prices falls, as well as the lack of mortgage funds.

Also appearing before the Treasury Select Committee, Bob Pannell of the Council of Mortgage Lenders (CML) warned that repossessions could increase during 2009, in response to rising levels of unemployment.

In 2008 repossessions are expected to rise by 50% to 45,000, according to the CML.

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