Predicted 7% House Price Fall
The Council of Mortgage Lenders (CML) has predicted that house prices will fall by at least 7% this year, expecting there to be 35% fewer property transactions in England and Wales than in 2007. In line with these predictions the Government has also predicted a fall of 5-10%.
The CML has also predicted that
mortgage lending will half from figures in 2007, at around £55bn in 2008.
At the end of 2007 it was predicted by the CML that house prices would rise by 1%. However with the recent events of the credit crunch, the
availability of mortgages has meant a revised prediction of a 7% fall.
Michael Coogan, CML Director General said, "In the wake of the credit crunch, 2008 will be remembered as a very weak year in the housing market."
Chief UK economist at Global Insight, Howard Archer, also predicted a 7% fall in prices this year. He warned,
"It is looking ever more possible that house prices will suffer double-digit falls both this year and in 2009 given serious buyer affordability constraints, limited and often more expensive mortgages available due to ongoing very tight lending conditions, a deteriorating economic outlook and reduced prospects for further interest rate cuts in the near term at least.
"Current rapidly deteriorating sentiment over the housing market also heightens the risk that house prices will fall sharply over the next couple of years."