House Prices Predicted to Fall in 2011

Aligned with this is that unemployment is rising amid the fallout of the recession, there are severe Government cutbacks and a reduction of household credit is expected.  This, according to the experts will hit prices during the rest of this year and in 2011.

 

Paul Diggle, from Capital Economics is a property economist.  He said: “Today’s figures showing accelerating house price falls fits with our long-held position that we will see a second leg of the house price correction soon. “With incomes set to be squeezed further, we believe that our pessimism about the housing market will prove justified. “Prices will close 2010 below their end 2009 level and we expect them to continue falling in 2011.”

 

Howard Archer, from Global Insight, is an economist.  He said: “It is hard at this stage to be optimistic about house prices in 2011 as the fiscal squeeze will increasingly kick in, which will hit people's pockets and lead to serious job losses in the public sector.”

 

A separate house price index by LSL Property Services suggested buyers are taking advantage of lower prices with the number of properties sold up 20 per cent to 63,500 in June, from almost 53,000 the previous month.