According to recent reports, house prices are likely to slump by a value of £50,000 off the average home by the end of 2009. This would take property prices back to 2004 levels, and represent a 25 per cent fall from peak to trough.
The predictions were made by the centre for economics and business research, who indicated that the average property would fall below the £150,000 mark. These declines are partly down to a massive lack of mortgage availability.
The Bank of England are expected to slash interest rates in the coming months, shaving a percentage point off the base rate by Christmas, according to experts. By next year, experts predict that interest rates will hit two per cent.
Group managing economist Ben Read was reported as commenting: "Confidence in the housing market has been shattered as lack of mortgage availability has left few sellers chasing even fewer buyers, and expectations of falling prices have become embedded. Now that the financial crisis turns into an economic crisis with rising unemployment and falling household incomes, we could see house price falls starting to accelerate again."
Mortgage market shatter housing confidence
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