Since property prices reached their peak in the UK in October of 2007 the value of homes in the nation have plunged, with many homeowners seeing tens of thousands of pounds being wiped off the value of their homes.
Over recent months there has been some upward movement in property prices, which some industry officials have heralded as definite signs of recovery. However, there are many sceptics who have said that the house price increases are not sustainable and that property values will continue to fall next year.
According to a recent Bloomberg survey property prices in the UK are set to continue falling again over the course of next year before stabilising.
The survey also suggested that property prices in the UK will not reach the same value as they were at in their 2007 peak again until around 2014. Out of fourteen economists and estate agents that were surveyed as part of the study nine said that they predicted property prices would fall next year.
One economist with Capital Economics, Seema Shah, said that property values in the UK were still vastly overvalued, and that in order get back to their long term trend they needed to fall by between 20 and 25 percent.
She added that although property prices had increased by around 7 percent since April of this year this was most likely due to lack of supply in the property market compared to the level of demand.
The chief executive of the Nationwide mirrored views that the property market would slide over the course of 2010 in terms of property values. He stated: “We are cautious on the outlook for the housing market and believe anticipated growth in unemployment throughout next year will apply downward pressure on house prices.”
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