House prices 'to fall 9% in 2008'
The average price of a home for sale in London and around the UK looks set to fall by nine per cent this year.
That is according to HBOS, Britain's biggest mortgage lender, which has revised its assessment of the market in the wake of a slew of recent reports.
Issuing a trading update, the bank said the housing market remains "subdued" and that the number of home sales is expected to fall by 45 per cent against 2007's levels.
It now says plans are afoot to write off more of its loan books as potential bad debts, noting that the proportion of mortgages entering arrears has spiked by 0.13 per cent over the past five months.
HBOS made its predictions the day after Bank of England Mervyn King revealed that the UK faces its "most difficult economic challenge for two decades".
Responding to the news that UK inflation has reached a 16-year high of 3.3 per cent, Mr King said that the slowdown in the housing market would inevitably become more pronounced.
Published 19th June, 2008
© 2008 Estates IT Limited
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The average price of a home for sale in London and around the UK looks set to fall by nine per cent this year.