UK house price forecast revisions

Developments over the past quarter have highlighted the downside risks to our house price forecasts. Accordingly, we have cut them. We now think that house prices will fall by 8% this year, rather than 5%. We have also nudged down our forecasts for 2009, from a fall of 8% to a fall of 10%. Taking into account the dip in prices in the final months of 2007 that means that property prices will end next year roughly 20% lower than their 2007 peak. We will flesh out the details of the new forecasts in our new Housing Market Analyst which will be sent to clients later this week.