CEBR predicts a further 8% fall in house prices
The Centre for Economics and Business Research (CEBR) is predicting that UK house prices will fall by 28% from their 2007 peak, before the downturn ends.
According to the think-tank, the market will bottom out early next year, having lost a further 8%.
A period of stagnation is likely to follow, with growth returning during 2013 and the average house price increasing to £170,000 by December of that year.
The latest Nationwide survey put the average price of a home at £151,861 in April and according to the CEBR report this will decline to £144,000 by the end of 2009.
An author of the study, Benjamin Williamson, says: “Worsening conditions in the labour market and the wider economy seem likely to counter-balance historically low interest rates and slowly improving credit conditions.”
Colleague, Ben Read, adds that the slowdown in housebuilding over the past 18 months could lead to stronger growth in house prices from 2012 or 2013, given that there will be a medium-term shortage of supply.