Housing slump likely to be over in 2009, says LSR

Posted under News by Alan

A forecast by the Lombard Street Research (LSR) says that the UK housing slump may be over by end of 2009.

LSR, regarded as one of the most reputed economic consultancies of London, claimed that home prices have now come to “affordable” levels.

LSR worked out an affordability index in co-ordination with The Daily Telegraph, which revealed that house prices throughout the UK are far better than their long-term average, for the first time in 5 years.

According to LSR’s senior economist, Jamie Dannhauser, house prices levels will bottom out at the end of 2009, and the recovery will be little extra than the bounce from bottom.

Dannhauser believes that current average prices are quite affordable for those with hefty deposits and good credit rating.

Property prices have gone down by around 20% since onset of credit crunch in last 18 months. There are many industry watchers who are forecasting further decline of 15% on account of rising unemployment.

But LSR believes that combination of low interest rates and falling prices means prevailing prices are good value for those having capacity to pay big deposit.

Earlier in April, Halifax reported 1.9% fall in the UK house prices in March, as compared to February. But just a day later Nationwide’s house price index showed 0.9% increase in March.

The Centre for Economics and Business Research (CERB) also hinted that housing market recovery may be around the corner.

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