Lenders are predicting a sharp fall in house prices during the rest of 2008 – 7 per cent, according to the Council of Mortgage Lenders (CML), by the end of the year.
This represents a turnaround in the CML's thinking: last December it said prices would rise by 1 per cent during 2008.
The CML attributes the decline to the credit crunch, which has made it harder for buyers to secure competitive mortgage deals and has helped choke demand for property. "This will be remembered as a very weak year in the housing market," said CML director-general Michael Coogan.
Recently, The Royal Institution of Chartered Surveyors revised its 2008 prediction – prices remaining unchanged – to a 5 per cent fall.
The CML, though, has not changed its forecast for property repossessions in 2008, sticking to its earlier predicted figure of 40,000. This would represent a 50 per cent rise on 2007 but would still be a long way short of the figures of the early 1990s.Reuse content