House prices could 'still plummet yet'

Posted: 16 Mar 2009 12:31:44 GMT

House prices in the UK could fall by as much as another 40 to 55 per cent, City investment bank Numis Securities has claimed.

Research into the housing market led the bank to suggest that the price of property could continue a fall until the average home costs less than £100,000.

Such a phenomenon would occur only in the event of an over-correction, the bank said, which means that confidence levels remain so low after an initial correction that prices continue to decline, past an accurate price level for that property.

A statement released by Numis explained: "Our core headline forecast is that UK property prices remain between 17 per cent and 39 per cent overvalued based on fair valuation.

"Moreover, history has shown us that when property…which has experienced a price bubble corrects, the price tends to fall below fair value for a period of time, as confidence in that market remains low."

Homeowners selling their property at present may wish to sell their home online to attract more potential buyers, as speeding up a sale could reduce the chances of negative equity affecting a property.

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