BoE: House prices 'could fall 33%'
UK house prices look set to fall by one third, a member of the Bank of England's (BoE's) Monetary Policy Committee has warned.
Speaking to the Royal Society in Edinburgh, David Blanchflower said the credit crunch was hitting hard, with property expected to be one of the worst-hit casualties.
"In my view a correction of approximately one third in house prices does not seem implausible in the UK over a period of two or three years if house price to-earnings ratios are to be restored to more sustainable levels," he commented.
House prices have fallen for six months running, according to Nationwide, and many pundits are signing up to the belief than an earlier forecast of a dramatic 30 per cent house price crash could hold water.
That prediction was made by the International Monetary Fund last year but was initially lampooned as being sensationalist.
Alluding to his own comparable forecast, Mr Blanchflower said: "I am not suggesting that such a drop will necessarily occur, but it may. Cutting interest rates now may help to prevent such a dramatic fall."
Published 1st May, 2008
© 2008 Estates IT Limited
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UK house prices look set to fall by one third, a member of the Bank of England's (BoE's) Monetary Policy Committee has warned.