Roger Bootle of Capital Economics paints grim picture for the UK housing market

Posted under News by Jermaine

Roger Bootle, economist at forecasting agency, Capital Economics, has forecast gloom for the UK housing market in 2009. The former chief economist of HSBC was speaking at the Annual Conference and Exhibition, organised by the Chartered Institute of Housing South East in Brighton this week. He is predicting increase in number of owners entering negative equity and huge rise in repossessions.

His forecast indicates repossession to cross 90,000 figure in 2009, while around 3.5 million households are likely to fall into arrears, twice the number witnessed in the early 1990s downturn.  However, the forecast by the Council of Mortgage lenders indicates repossessions to touch figure of 75,000 for the current year.
Analysts and observers of the UK housing market are expecting a further peak-to-trough fall of 40 t0 45% in house prices.

According to a report by Halifax, house prices crashed by 2.3% in February, taking average UK home price to £160,327. With this fall the annual rate of decline for house prices has touched 17.8% level, informed Halifax.

Bootle believes that current economic downturn is the worst since 1945-48 economic slump which was the aftermath of fierce world war II.

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