» Property prices fall but will rise sharply

Experts predict the market will recover fully in time

Article Published: 15th October 2008

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Professor of Science Dave Miles, has predicted, along with other industry commentators, that property prices will fall a further 10 per cent if interest rates remain at their current level. Professor Miles was addressing the Treasury Select Committee in the House of Commons, he said that if his worse predictions were to materialise the price of property will have dropped by 20 per cent from their peak valuation. It is estimated that the majority of homebuyers that have bought since January 2006 have paid more than their property is currently worth.

The feeling that prices will drop even further was having a bad effect on the market as vendors hold off from committing to selling their property and this increases the difficulty in predicting when and if further price reductions are to be expected.

Professor Miles took the view that once the market did recover its ground it should rebound ‘quite sharply’ once it had bottomed out.

House prices had seen the smallest drop in seven months by 1.3 per cent in September taking the average price to £172,108 per property. Property prices declined by 5.2 per cent in the three months from July to September and the most recent figures available say the average deposit is now at 16 per cent further pushing first time buyers out of the market.