The investment management wing of Legal and General today warned that UK house prices are unlikely to recover to 2007 levels within the next decade.
Tim Drayson, economist at Legal and General Investment Management (LGIM), predicted that prices will fall by a further 10 to 15 per cent in 2009 - a prediction supported by other forecasts.
Drayson also suggests, however, that there will be little expansion in housing prices for up to five years, as income will still lag behind prices. From that point it will be a further five years before the peaks of 2007 are reached again.
LGIM"s predictions are perhaps the bleakest to be made by a reputable forecaster since the crisis began. However, even these figures fall short of the bets being made by property derivatives traders, who are banking on a total fall of 50 per cent from October 2007"s levels.
