Citigroup warns house prices will continue to fall

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by Lin Freestone

In an interview broadcast on the BBC, the chairman of Citigroup, one of the world’s largest consumer banks, warned that house prices in the UK and the US are likely to fall for another two years.

According to Sir Win Bischoff, who became chairman of Citigroup in December 2007, the credit crunch will continue for the rest of the year and into 2009. He expects that the financial markets will not stabilise for another two years.

The former chairman of Schroders, the British merchant bank, he was little known in the US before he was appointed to replace Charles Prince, the chief executive who left in early November 2007, following massive credit-crunch writedowns.

Citigroup employs approximately 12,000 people in the UK and the bank will be cutting jobs and selling assets to enable it to ride out the financial turmoil.

The Royal Institution of Chartered Surveyors, which records the numbers of people moving house in the UK, reports that the figures are at their lowest level since the collection of data began in 1978.