Further falls to hit residential market, predicts Hometrack

  House prices are set to fall by a further 10% next year, although it is impossible to “accurately predict” prices in this difficult market, says Hometrack.   According to the housing research group’s 2009 housing market forecast, prices fell on average by 9% in 2008, with an average forecasted fall of 3% forecast for 2010. This represents a peak to fall drop of 22%.   Sales volumes fell by 45% this year, and Hometrack predicts they will fall by a further 12% to 685,000 in 2009.   Repossessions are also set to rise from 45,000 in 2008 to 70,000 in 2009.   Hometrack’s director of research Richard Donnell said: “The onset of recession and rising unemployment is set to act as a major constraint on demand compounding the level of price falls in the near term.   “Given the rapidly changing outlook for the economy, no one can accurately predict how much property prices will fall in the short to medium term.”   helen.roxburgh@egi.co.uk   Hometrack bases its predictions on the house price index from the Department for Communities and Local Government (DCLG).   UK lenders Halifax and Nationwide, along with the Council of Mortgage Lenders, have announced that they will not issue house price forecasts for 2009, saying the rapidly moving market is too difficult to predict.   Halifax will still issue a monthly house price index, but a prediction for 2009 would go into the period when it becomes part of Lloyds banking group. Halifax’s last prediction towards the middle of 2008 was that house prices would fall by about 20% over the whole of 2008 and 2009.   helen.roxburgh@rbi.co.uk