Even the government expects house prices to keep falling
Whilst the government has tried to make minimal fuss about house prices falling in the UK over the course of this year, an inadvertent blunder by the housing minister, Caroline Flint, recently dominated the headlines. She was photographed walking into number 10 for a cabinet meeting, holding documents that clearly stated that the government was expecting house prices to fall by ‘5-10 percent at best’ over the course of this year.
According to reports the paperwork read: “given present trends they will clearly show sizeable falls in prices later this year – at best down 5-10% year-on-year”.
It also mentioned a possible slowdown in house building, reading: “House building is stalling. New starts are already down 10% compared to a year ago. House builders are predicting further falls. Having seen net additions reach roughly 200,000 in each of the last two years, the figure for 2008-9 is almost certain to be well down on that.”
Government officials have tried to play down the revelation, stating that there was nothing in the documentation that had not already been voiced in public. House prices have already now fallen to a point where they are nearly 5% lower than they were this time last year, although they are still 5% higher than this time two years ago, and 10% higher than they were three years ago.
The Council of Mortgage Lenders has also changed its predictions on house price movement for this year recently, having switched from the 1% rise that it predicted last October to a 7% drop over the course of this year. Some other industry officials have predicted far greater falls, with some in excess of 20%.
Recent news:
- More help to be offered to homeowners facing repossession
- Estate agents at risk of problems due to mortgage and housing chaos
- Brokers complain over lack of access to mortgage deals
- Slump in lending levels fuelled by credit crunch
- Struggle continues for first time buyers
- Many lenders ignore base rate cuts
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[...] Even the government expects house prices to keep falling [...]