Experts admit defeat on house price figures

The Council of Mortgage Lenders says that trying to predict house prices in the current market is futile.

by Experts admit defeat on house price figures
Last Updated: 31 Aug 2010

It may only be what we have all been thinking recently, but for the CML of all organisations to come out with this indicates just how bad things are in the property market, and how rapidly prices are still declining. The body which represents the combined interests of the nation’s mortgage lenders, the CML is a standard repository of facts, figures and commentary on all things property and mortgage related.

This unexpected bout of frankness was apparently brought on by the realisation that its prediction back in May of a 7% fall for the year is way off the mark. Rather than attempt to replace this with another, probably equally rapidly outdated number the CML has opted instead to refrain from issuing anymore predictions until the market position becomes clearer.

Here at MT we think this is a sensible decision – the CML is far from alone in having been caught out by the sharpest fall in sales and prices for decades. Mortgage lending in August was at its lowest for the month since 2002, and house sales overall may be at a 30-year low. In such extraordinary times there is more respect to be had from the occasional ‘don’t know’ than from attempting to provide answers to impossible questions.

Besides, there are more than enough Jonahs who are still willing to opine on the parlous property market. The consensus view among lenders  – backed by two of the biggest, Graaham Beale of Nationwide and Andy Hornby of recently-acquired HBOS – is that the market won’t recover for another two years and that prices will fall by around 25%. Let’s just hope that the events of the coming few months don’t make that prediction seem as rosy-tinted as those we were hearing back in Spring.

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