House prices to fall 20%

UK house prices are set to fall dramatically over the course of this year and 2009, a new property forecast has predicted.

According to Capital Economics, the house price market will fall by as much as eight per cent this year, indicating that it will be a bad time to consider purchasing a new home.

It also said that in total, prices will fall by as much as 20 per cent by the end of 2009 when compared to the peak recorded in 2007, Reuters reported.

The research consultancy revealed in a statement that it had altered its predictions in line with the recent drop in mortgage approvals, which it said has yet to be fully reflected in house prices.

Ed Stansfield, property economist at Capital Economics, also said that the dip in cnsumer confidence that has occurred in the UK as a result of the credit crunch has also yet to have a full impact on house prices.

On Monday (April 21st), the Bank of England unveiled a plan to inject £50 billion scheme to boost the UK's banking system.

News posted on 24th April, 2008