Economists from a leading consultancy firm have painted a very bleak picture of the housing market a year from now, having predicted that house prices are set to continue plummeting, and that in a year’s time house prices could be around 35 percent lower. This, said the economists from Capital Economic, would make this the worse housing crash in the history of the nation.
One official from the company stated: ‘The sheer speed of adjustment is causing alarm. While a period of falling house prices will inevitably be painful, we believe that the quicker house prices return to fair value, the less damage the housing market correction will do to the wider economy.’
Another official stated: ‘With more base rate cuts on the horizon, which in part are intended to reduce the burden on household finances, we could find ourselves in a situation where the Bank of England’s decisions on a rate cut will have little or no bearing on the majority of families’ mortgage outgoings. It could ultimately result in an increase in repossessions.’
An economist from Global Insight said: ‘Housing market activity and house prices seem poised for further weakness as the fundamentals remain largely unfavourable.’
