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| Version 4 | Version 5 |
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| House prices 'will fall further' | House prices 'will fall further' |
| (2 days later) | |
| House prices will probably fall by another 10% in the coming year, predicts the Royal Institution of Chartered Surveyors (Rics). | House prices will probably fall by another 10% in the coming year, predicts the Royal Institution of Chartered Surveyors (Rics). |
| That would produce an eventual price drop of 25% from the peak recorded in the summer of 2007 - the biggest ever. | That would produce an eventual price drop of 25% from the peak recorded in the summer of 2007 - the biggest ever. |
| The annual forecast from Rics suggests that property sales may have bottomed out and could rise by 10% during 2009. | The annual forecast from Rics suggests that property sales may have bottomed out and could rise by 10% during 2009. |
| But Rics says the government must take action to restore the flow of mortgage funds to borrowers. | But Rics says the government must take action to restore the flow of mortgage funds to borrowers. |
| "The numbers are going to get worse before they get better", warned the trade body's chief economist Simon Rubinsohn. | "The numbers are going to get worse before they get better", warned the trade body's chief economist Simon Rubinsohn. |
| "Lenders are likely to remain cautious in the near term in the absence of any guarantees on mortgage backed securities. | "Lenders are likely to remain cautious in the near term in the absence of any guarantees on mortgage backed securities. |
| "This, coupled with an increasingly gloomy economic picture, suggests that house prices will continue to decline in 2009," he added. | "This, coupled with an increasingly gloomy economic picture, suggests that house prices will continue to decline in 2009," he added. |
| Fewer new houses | Fewer new houses |
| The past year has seen an unprecedented slump in house prices and sales. | The past year has seen an unprecedented slump in house prices and sales. |
| A serious housing shortage will fuel another bout of volatility once the current crisis eases Simon Rubinsohn, Rics Mortgage lending 'shrinks again' | A serious housing shortage will fuel another bout of volatility once the current crisis eases Simon Rubinsohn, Rics Mortgage lending 'shrinks again' |
| So much so that leading lenders like the Halifax and HBOS, and their trade body the Council of Mortgage Lenders (CML), have been deterred from making any forecasts for next year. | So much so that leading lenders like the Halifax and HBOS, and their trade body the Council of Mortgage Lenders (CML), have been deterred from making any forecasts for next year. |
| "Uncertainty surrounding any forecast is much greater than is usually the case," Mr Rubinsohn said. | "Uncertainty surrounding any forecast is much greater than is usually the case," Mr Rubinsohn said. |
| Unlike those other commentators Rics is still willing to make a formal forecast. | Unlike those other commentators Rics is still willing to make a formal forecast. |
| As well as a 10% price drop, and 10% increase in sales, it says there will be a further big decline in house building. | As well as a 10% price drop, and 10% increase in sales, it says there will be a further big decline in house building. |
| The surveyors suggest that new housing starts will plunge from their already depressed level of 110,000 this year to under 80,000 in 2009, far short of the government's own target of building two million new homes by 2016. | The surveyors suggest that new housing starts will plunge from their already depressed level of 110,000 this year to under 80,000 in 2009, far short of the government's own target of building two million new homes by 2016. |
| "It is likely that there will be even fewer new starts in 2009 leading to a very real risk that a serious housing shortage will fuel another bout of volatility once the current crisis eases," Mr Rubinsohn said. | "It is likely that there will be even fewer new starts in 2009 leading to a very real risk that a serious housing shortage will fuel another bout of volatility once the current crisis eases," Mr Rubinsohn said. |
| Interest rates | Interest rates |
| Rics has taken some heart from the fact that its monthly surveys have found that enquiries from potential new buyers have been picking up in the past few months. | Rics has taken some heart from the fact that its monthly surveys have found that enquiries from potential new buyers have been picking up in the past few months. |
| But it warns that if the economic recession turns out to be deeper and longer than expected, and if unemployment rises to three million or more, then house prices are likely to fall even more than its current prediction. | But it warns that if the economic recession turns out to be deeper and longer than expected, and if unemployment rises to three million or more, then house prices are likely to fall even more than its current prediction. |
| Rics says it expects the authorities will cut official interest rates by a further one percentage point in the first quarter of 2009, from 2% to just 1%. | Rics says it expects the authorities will cut official interest rates by a further one percentage point in the first quarter of 2009, from 2% to just 1%. |
| But any revival in the market will also depend on the effectiveness of the various government programmes aimed at providing more help to the banks, so they they can start lending again on less restrictive terms than at present. | But any revival in the market will also depend on the effectiveness of the various government programmes aimed at providing more help to the banks, so they they can start lending again on less restrictive terms than at present. |
| "As yet, however, there are few signs of improvement in lending behaviour," Rics warns. | "As yet, however, there are few signs of improvement in lending behaviour," Rics warns. |
| This point was echoed by Peter Bolton King, chief executive of the National Association of Estate Agents who called for a "major effort" from the banks and government. | This point was echoed by Peter Bolton King, chief executive of the National Association of Estate Agents who called for a "major effort" from the banks and government. |
| "For many estate agents, like so many industries in this economic climate, 2009 will be make or break," he said. | "For many estate agents, like so many industries in this economic climate, 2009 will be make or break," he said. |
| "If things do not improve, then the market could stagnate and that will have dire implications not only for the thousands of people employed in the profession, but for the economy as a whole." | "If things do not improve, then the market could stagnate and that will have dire implications not only for the thousands of people employed in the profession, but for the economy as a whole." |
| He claimed that agents in some areas had reported 20% falls in house prices from their peak but he predicted that these decreases would begin to bottom out during the year. | He claimed that agents in some areas had reported 20% falls in house prices from their peak but he predicted that these decreases would begin to bottom out during the year. |
| He forecast that in some markets, following cuts in interest rates and increased consumer confidence, the bounce back could be as pronounced as the fall. | He forecast that in some markets, following cuts in interest rates and increased consumer confidence, the bounce back could be as pronounced as the fall. |
| While potential homebuyers are unable to find a mortgage and sellers find the market remains flat as prices fall, demand and supply of rented properties could rise. | While potential homebuyers are unable to find a mortgage and sellers find the market remains flat as prices fall, demand and supply of rented properties could rise. |
| This, according to the Association of Residential Letting Agents could force down rents. | This, according to the Association of Residential Letting Agents could force down rents. |
| However, it suggested that these "reluctant landlords" could be tempted to remain in the buy-to-let sector in the longer term. | However, it suggested that these "reluctant landlords" could be tempted to remain in the buy-to-let sector in the longer term. |
| It said the prospects for property investors would be patchy. Some government-support packages do not cover the sector and so it predicted the rate of repossessions would rise. | It said the prospects for property investors would be patchy. Some government-support packages do not cover the sector and so it predicted the rate of repossessions would rise. |