House prices'might not recover for another 10 years'
News Category: Industry News
Published: 14-Jul-2010
PricewaterhouseCoopers has warned there is an even chance that house prices will still not have recovered by 2020 and that bricks and mortar are no longer a solid investment.
PwC said housing is a risky asset “that is not guaranteed to generate positive real returns in the future, even though this has been the pattern in the past”.
While the firm expects a recovery in house prices in cash terms by 2015, taking inflation into account, it says, there is a 70% chance that UK house prices will still be below peak 2007 levels.
In 2020, there is a 50% chance that house prices could be below the 2007 mark.
John Hawksworth, head of macro-economics at PwC, said: “The possibility of a renewed fall in house prices over the next few years, particularly in real terms, cannot be ruled out as mortgage interest rates start to rise again.”
Meanwhile, in its usual barely intelligible monthly report, the RICS said that evidence is rising that house prices are set to fall.
New buyer inquiries fell, it said, while properties new to the market rose.
RICS spokesman Jeremy Leaf said: “With supply of property now beginning to outstrip demand, there is a risk of some modest slippage in prices during the second half of the year.”
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