Could house prices fall? Asks London Mortgage Broker, London Mortgage Advice Friday, 30th October 2009

Over the next two years., house prices could fall 15% say some economists. They are predicting further substantial falls in average UK house prices.

Some say that property prices will slump by 10% next year and 5% in 2001, thanks to a combination of increasing unemployment and its attendant problems, combined with a continued mortgage drought.

Next year the Government will have no choice but to cut public sector spending, resulting in mass job cuts for civil servants.
The current recovery in the housing market, with house prices indices show increasing prices for five successive months, is not sustainable as whichever party is in government

Recovery will be slow and therefore one should not expect a hasty recovery.

And when we do get stronger growth this may well be accompanied by higher interest rates. That would only add to the pressure for lower house prices.

Some economists think that house prices will bump along the bottom next year as lack of stock for sale is propping up house prices, combined with an influx of cash buyers from abroad taking advantage of the weak pound.

For a sustainable recovery the UK economy needs world trade to pick up and there is still not much sign of that happening.