House prices are set to tumble by more than 10% next year, according to City traders. This weekend they warned that residential property values might continue to suffer up until 2012. Independent on Sunday
In a dramatic turnaround, bearish investors in the Square Mile are betting that values will slide by 10.5% by the end of November next year, with the average price of a house in Britain dipping back to £173,861.
At the beginning of 2007, those same traders estimated that the price of the average UK house would climb to £194,985 at the same point, as measured in the house price index at City brokerage Tradition Financial Services.
Peter Sceats, director of property real estate at TFS, said a hardening of opinion had surfaced in recent months, with 'the overriding sentiment in the market continuing to be very bearish despite the rate cut'.
Sceats added that derivative or "forward values" for house prices, as measured by the TFS index, had begun to turn down much earlier in 2007 than many of the mainstream indicators such as the Halifax or Nationwide indices.