House prices 'to fall by £50,000'

Property prices are set to fall by £50,000 a by the end of 2009, a new report has revealed.

According to the Centre for Economics and Business Research (Cebr), average prices peaked at around £200,000 last year and could fall by 25 per cent to around £150,000 by December 2009.

Cebr's managing economist Ben Read said: "Confidence in the housing market has been shattered as lack of mortgage availability has left few sellers chasing even fewer buyers and expectations of falling prices have become embedded."

Mr Read added that rising unemployment and falling household incomes could see house price falls starting to accelerate again.

However, Cebr has forecast that prices will stagnate in 2010 before climbing by around 20 per cent during 2011 and 2012.

Meanwhile, property information group Hometrack has claimed that the volume of homes changing hands increased for the first time in five months during October.