Sharper price falls now on the cards

The house price slowdown will continue well into next year as financial problems continue to make themselves felt throughout the economy, analysts have predicted.

Citigroup analyst Michael Saunders has said that a fall of as much as ten per cent could materialise at any point over the next few years.

Mr Saunders is currently expecting prices to fall by three per cent "each year until the end of 2010", according to comments reported by the Daily Telegraph.

Global Insight, meanwhile has downgraded its own forecast in light of the latest set of market data.

"Global Insight now expect house prices to fall by three per cent in 2008, having previously expected them to be flat. We also expect house prices to remain muted for an extended period beyond 2008," said Howard Archer, chief UK and European economist at the firm.

Global Insight had previously said that prices would remain flat next year.

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