According to a survey of 225 members of the Society of Business Economists (SBE) 60% of their members suggested house prices will not recover their peak level (July 2007) until 2012.
56% of respondents thought house prices will fall by 20% from their July peak; some believed prices could fall by 30% in nominal terms.
Meanwhile the CBI suggested the UK economy faces its worse outlook since 1992. The CBI forecast rising inflation, rising unemployment and slowing growth. They say the rise in oil prices combined with slowdown in consumer spending is causing an unpleasant mix of rising prices and falling output.
The rise in unemployment could cause a further rise in home repossessions which will do nothing to help improve the housing market.
If inflation rises to 3.8% as predicted it will present an unwelcome dilemma for the Bank of England. Homeowners hoping for rate cuts in the near future, are likely to be dissappointed.
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[...] Some people believe that the above factors mean that house prices could actually fall a long way upto 30% or even 50% in real terms. Economists predict 20% fall [...]
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