£20,000 to be wiped off every home

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by Kay Murchie

There has been a lot of speculation from experts about the housing market lately with many saying house prices will plummet this year.

Research from accountants at Grant Thornton has stated that an average of £20,000 will be wiped off the value of every home by the end of the year.

This equates to a 10% decline in house prices compared with their peak in August. As a nation, this would wipe £400 billion off the value of UK residential property.

In the last decade, property prices have more than doubled and, as a result, has promoted a feeling of economic well-being and security that, in turn, produced a consumer spending boom.

The reverse in property prices could have the opposite effect say Grant Thornton warning that the decline will dent consumer confidence. Homeowners will feel worse off and lead them to tighten their purse strings and restrict spending, resulting in store closures and job losses.

Maurice Fitzpatrick of Grant Thornton said it appears that house prices hit their peak in August. A fall of 3% is expected by the end of 2007 followed by a further fall of 7% in 2008.