House Prices Likely to Fall by Ten Percent by Next Year

A leading economic forecasting company, the IHS Global Insight predicted a fall of 10 percent in the house prices in UK by the end of the year 2011.

Its economist Mr. Howard Archer said that the prices were likely to fall by 3 percent by the end of 2010 and a further dip was also expected during the last months of 2011.

“On balance, while we believe that a sharp correction in house price is unlikely … we believe that they could be some 10pc lower by end-2011,” Mr. Archer said.

Meanwhile the survey done by the Royal Institution of Chartered Surveyors (RICS) showed that the number of properties coming to the market has increased sharply since May 2007.This has caused the supply/demand balance to move in favour of buyers.Mr, Archer said that the housing market activity was currently low, mortgages were hard to get for many people due to tight lending conditions.

The IHS group said that a slight increase in mortgage lending in July only reflected the seasonal rise, still the lending volumes represented a very weak market.

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