The past quarter brought no evidence of a stronger economic recovery, an easing in credit conditions or any resolution to the euro-zone crisis. Therefore, with households cautious, housing market activity is unlikely to improve. Indeed, signs of a renewed tightening in credit conditions in recent months suggest that the pace of house price falls could soon accelerate. Our forecast is for house prices to fall by 5% in both 2012 and 2013 and by 3% in 2014. There is a risk that a London-centric shock, such as a disorderly break-up of the euro-zone, could trigger sharper house price falls.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services