Mortgage Lenders predicts 7% house price fall
The Council of Mortgage Lenders (CML) has predicted a 7% drop in UK house prices during 2008.
The CML expects there to be 35% fewer property transactions in England and Wales this year than in 2007.
The government’s own advisers last week suggested that house prices would fall 5-10% in a briefing paper to Cabinet.
The CML’s updated housing market forecast came as UK gross mortgage lending hit £25.3bn in April, a 5% rise from March but an 8% annual decline.
The lenders’ group also predicts that net mortgage lending will be £55bn in 2008, half of what it was in 2007 and down from its previous forecast of £90bn.
At the end of 2007, the CML predicted that house prices would rise by 1% in 2008, but the effects of the credit crunch on the availability of mortgages has led to the revised prediction of a 7% fall.
“In the wake of the credit crunch, 2008 will be remembered as a very weak year in the housing market,” said CML director general Michael Coogan.
‘Crumbs of comfort’
A fall in prices would be welcomed by some who have seen a decade of price rises rule them out of the market.
In the wake of the credit crunch, 2008 will be remembered as a very weak year in the housing market
Michael Coogan, CML director