House price slump could last several years
Over recent months consumers and industry officials have seen the value of properties in the UK falling over recent months, and many reports from different agencies have shown the level of falls in house prices. More recently, a report has been released that predicts the house price slump in the UK could last around four years. Officials stated in the report that it could take around four years for property prices in the UK to exceed the peak that was seen in 2007. These predictions were made by the Society of Business Economics, and around two thirds of the 225 members of the society thought that a recovery in house prices could take four years.
Reports have also indicated that around half of officials from building societies and banks, as well as other financial industry sectors, have predicted that the value of homes could plummet by up to 20%. Many others have predicted falls of between 6-10%, which is the figure that was predicted by the government, but some have given particularly gloomy predictions of falls equating to 30% or more.
Those that have recently purchased their properties and paid a fortune for them are going to be worst hit in terms of trying to recoup the money on the value of their homes according to some industry officials. One industry professional said: ‘It doesn’t look like we’re going to see a fall, which is what we’re in the middle of, and a quick bounce back. It does look as though it’s going to go on, and we’ll have slow growth for some time.’
Many are now concerned that more recent property purchasers are now facing negative equity as a result of falling house prices, with house prices having fallen over the past few months consecutively. Property sales have been falling rapidly over recent months too, and it is thought that part of the reason behind this is the fact that people do not want to commit to purchasing a property when there is a high risk that the value of the home could fall further.
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