Thread: House prices predicted to fall for next 5 years

Not good news for Brits looking to move abroad, but still trying to sell their house -the latest report from the National Institute of Economic and Social Research (NIESR) on prospects for the UK economy predicts that house prices will continue to fall for the next five years.

According to the NIESR, real house prices will fall by 4.5% in 2011 and by an average of 1.5% per annum in the subsequent four years, as borrowing costs rise because of tighter monetary policy.


The institute’s research shows that higher loan-to-income ratios for new mortgage borrowers were a major reason for the house-price boom of the 2000s, which turned to bust in the financial crisis. Supply constraints were less important than is often argued, since supply just about kept pace with household formation.


This suggests, says the NIESR, that regulation should focus on limiting loan-to-income ratios, and that increasing housing supply, as recently advocated by the Organisation for Economic Cooperation and Development, would be less fruitful, although perhaps useful, and a housebuilding boom would stimulate growth.

TBH, Economic forcasts chance like the wind and for every "expert" opinion there is an other "expert" with a contradicting opinion. When it comes to economics you may as well ask that octopus.