Housing slump ‘could be over next year’

16 October 2008

The housing slump could come to an end as early as next year if the cost of home loans were to fall by another half-point, a leading economist has said.

According to David Miles, chief UK economist at Morgan Stanley, if mortgage rates stayed at current levels, house prices could fall by another 5 to 10 per cent before the market ‘bottomed out’ next year.

But he told the Treasury Select Committee: “If the cost of funding to lenders were to move down half a point, then the 5 to 10 per cent fall could turn into a much smaller number, or not much at all.” A spokesperson for Think Money said: “This is one of the more optimistic views – other experts have speculated much sharper falls in house prices – so the situation remains uncertain.

“This is just one reason it makes sense for potential homebuyers to ensure they are getting good mortgage advice.”

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Tags: housing, house, mortgage, mortgages

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