Rics: house prices down 10% or more in 2009

Rics: house prices down 10% or more in 2009

The Royal Institution of Chartered Surveyors (Rics) is predicting that UK house prices will fall by around 10% during 2009, although the reduction could be greater if the number of people out of work reaches three million.

Such a decline would result in a drop of at least 25% from the peak of the market in summer 2007.

Rics chief economist, Simon Rubinsohn, expects lenders to remain cautious in the near term, however sales could pick up during next year, as the availability of mortgage finance improves.

The institution is therefore expecting a 10% rise in transactions, up from the historic lows seen in 2008.

Earlier this week property intelligence website, Hometrack, predicted that UK house prices will fall by a further 10% during 2009, with the decline continuing in 2010 but slowing to three per cent over the year.

Legal & General Investment Management is somewhat gloomier and expects the value of UK residential property to decline by between 10% and 15% next year.

The fund manager goes on to predict that prices will not recover to their 2007 peak for at least a decade.

Meanwhile, the chief executive of Barclays, John Varley, is also predicting a fall of up to 15% and has forecast a peak-to-slump decline of between 25% and 30%, against a backdrop of a shrinking economy.

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