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December 22, 2008

Nationwide and Halifax to end house price forecasts

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by Lin Freestone

Nationwide and Halifax to end house price forecasts

UK lenders Nationwide and Halifax have decided not to issue house price forecasts for 2009.

According to Nationwide, it is too difficult at the moment as the market changes so rapidly. Halifax, which is owned by HBOS, says making a prediction would be inappropriate due to its impending ownership by Lloyds TSB.

A spokesman for Halifax reports that a monthly house price index will still be issued, but a prediction for 2009 would go into the period when it becomes part of Lloyds banking group. Halifax’s last prediction towards the middle of 2008 was that house prices would fall by about 20% over the whole of 2008 and 2009.

The Halifax’s monthly house price survey has been published since 1983. A forecast has been made at the end of every year for at least the past decade, which has been closely followed by the industry.

Nationwide predicted a fall of 5% earlier in the year, but changed this in the summer to a prediction for a double figure fall. At the time of Nationwide’s first forecast, it was still assumed that the financial crisis would be relatively shortlived.

The Council of Mortgage Lenders has also declined to make any forecast of next year’s house prices because it considers it would be futile while the market is so inherently unpredictable.

IHS Global Insight has published house price forecasts for 2009, expecting house prices to fall by a further 15%.

Another forecast from Capital Economics predicts a 20% decline, while just last week Barclays warned that house prices are likely to fall a further 10% to 15% next year.

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