House prices in Britain could fall by as much as 40% this year, says one of the UK's top bankers, fuelling speculation that a mass sell-off of ever-cheaper properties might result.
Property prices in the UK are on a downward slide due to the Credit Crunch sparked in the US at the end of last year. Banks there refused to pay each other back what they owed, and now nobody can remember who owes who what. It's a real mess.
Now, British banks have realised they are in the same sorry state, and things would be worse if the government found all the customer data they have lost recently, containing information on investors and mortgage lenders.
A market expert told yesterday how property prices have already dropped sharply since the New Year, and how he expects further falls throughout the summer.
Ted Ricketts, of Northern Rock, said:
"We've already seen dramatic falls, and panic measures by the Bank of England won't help. A cut in interest rates might keep things a little more fluid, but for how long? Long term, we are looking at a disaster. It could be as much as 40% by Christmas."
Other experts agree. An employee of major lender Halifax, who wished to remain anonymous, said:
"It could be a case of 'batten down the hatches' and sit it out, but we may be waiting rather a long time."
