View from City Road: Building up the hopes once more

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The Independent Online
Pundits tend to be wrong most of the time. Housing market pundits are invariably so. Their record over the past few years has been dismal.

Rememember the classic verdict of the Henley Centre in August 1991? 'Prices to rise by 64 per cent over the next five years and by 92 per cent in London.' Three years into the forcast and, far from zooming upwards, prices have fallen by 5 per cent nationally and 20 per cent in London.

There are countless similar examples, including John Wriglesworth, housing market guru at the brokers UBS, who predicted in May 1991: 'Prices are set for lift-off and set to increase by 10 per cent in 1992.' They didn't of course - they actually fell by around 8 per cent that year.

Still, hope springs eternal in the analyst's breast and, undaunted, Mr Wriglesworth's successor Rob Thomas has now popped his head over the parapet, predicting house prices will rise 6 per cent between now and the end of next year.

That sounds modest enough. It has to be said, however, that an increase of a similar order was expected for this year too. Needless to say, house prices have stubbornly refused to budge.

Never one to let the cynics grind him down, Mr Thomas is really sticking his neck out this time by declaring house prices will increase by 50 per cent between now and the end of the decade. He sees the cyclical pattern in the housing market reasserting itself and house prices progressively strengthening over the next few years.

The slight softening of the market this autumn is merely a 'pothole on the road to recovery', he says. Let's just hope Mr Thomas hasn't dug himself a hole of Henleyesque proportions.