Analysts scale back predictions

With the latest sets of market data continuing to show that house prices are now flat-lining or falling, and the credit crunch showing no sign of abating just yet, analysts are revising their predictions for 2008.

Leading consultancy Global Insight has today said that it expects a three per cent fall in house prices next year, as opposed to its original expectation of flat growth.

The firm also believes that prices will remain muted into 2009, and though it foresees a "limited" downside, others are not so confident.

"It's going to be fairly bleak. I expect house prices to fall by three per cent each year until the end of 2010, though the ten per cent fall could easily come in one go," warned Citigroup chief UK economist Michael Saunders.

The Confederation of British Industry (CBI), meanwhile, has downgraded its own economic predictions and now expects annual economic growth to reach two per cent in the UK next year, down from its earlier expectation of 2.2 per cent growth.

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