Money News
5th August 2008
House prices 'to begin recovery by 2010'
A slowdown in the number of new build properties being constructed will help the recovery of the housing market, it has been predicted.
According to the Centre of Economics and Business Research (CEBR), the number of new build completions will fall by 20 per cent this year.
This will set the scene for a shortfall in supply which will help the market to start its return to health by 2010.
However, before this is enacted prices will fall by 14 per cent by the end of 2009.
Richard Snook, an economist at CEBR, said: "The credit crunch has caused a shock in the housing market much bigger than most people expected, and we are now seeing the second round effects of falling confidence and a slowing economy.
"When prices have fallen in the past we have seen house building slow quite rapidly but take a lot longer to come back, which leads to demand outstripping supply."
He added: "With the fundamentals of the housing market still relatively tight, the credit crunch might already have sown the seeds of the next house price boom."
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