Newspaper article Evening Gazette (Middlesbrough, England)

Home Prices Face Slump

Newspaper article Evening Gazette (Middlesbrough, England)

Home Prices Face Slump

Article excerpt

HOUSE price falls will have knocked pounds 50,000 off the value of the average home by the end of 2009, pushing property values back to their 2004 level, it was predicted today.

Property prices look set to fall by 25% from peak to trough, with the average home set to tumble from a high of just below pounds 200,000 to a low of around pounds 150,000 by the end of next year, according to the Centre for Economics and Business Research (Cebr).

The group said the steep falls would come despite its expectations that the Bank of England would cut interest rates by at least 1% before Christmas, with the base rate falling to just 2% by next autumn.

It also expects the Government's rescue package for the banks to start to ease the current mortgage shortage within the next few months.

Cebr expects prices to be broadly flat in 2010, before rising by around 20% during 2011 and 2012.

Ben Read, managing economist at Cebr, said: "Confidence in the housing market has been shattered as lack of mortgage availability has left few sellers chasing even fewer buyers, and expectations of falling prices have become embedded. …

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