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House prices to plunge 9% further, say brokers in Exact poll

House prices have a further 9.2 per cent to fall, brokers polled by Exact have forecast.

But Exact managing director Alan Cleary is more pessimistic, believing prices will drop a total 37 per cent from peak to trough.

This would mean prices have another 19 per cent to fall as according to Nationwide prices have already dropped an average 18.4 per cent since their peak in October 2007.

Exact surveyed 539 brokers and the weighted average house price fall that they forecast was 9.2 per cent, however 22 per cent of brokers felt house prices would plunge even further by between 10 and 20 per cent before reaching a floor.

Mortgage advisers were also downbeat about the duration of downward trend in house prices with 72 per cent believing they will continue to fall for another six to 12 months.

Consumers are also failing to see green shoots yet, as 57 per cent of brokers said their clients do not believe house prices have already reached a trough.

The research also reveals that 44 per cent of brokers do not see lenders increasing their volume of lending for at least six to twelve months, while 31 per cent believe it more likely that lending volumes would take between a year and eighteen months to improve.

Exact managing director Alan Cleary says: “Housing market commentators would have us believe green shoots have been springing up everywhere, but for those in the know about the UK mortgage market, sentiment hasn’t turned yet.

“House prices can’t recover until the mortgage market is fixed – and that’s some way off. Without the wholesale money markets, there isn’t enough cash to fund the kind of house buying which drove prices up in the past.”

He adds: “I’m expecting a 37 per cent peak to trough fall.”


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