26-11-2007
City of London predicts fall in house prices
News by Adfero for Simply Business - independent providers of business insurance, business finance, landlord insurance, buy-to-let mortgages & commercial mortgages.
A fall in the cost of the UK's housing stock has been predicted by the City.
Reports by the Financial Times shows that tradable derivatives contracts are anticipating a house price fall of seven per cent for 2008, compared with the two per cent decline predicted in October 2007.
Tradable derivatives contracts were introduced earlier this year and currently anticipate that within 12 months, the average cost of a property will decline to £183,970.
"Bankers, hedge funds and property companies are putting their money where their mouth is and that makes these prices more reliable," said Peter Sceats, a derivatives broker at TFS Property.
"[Those] who are making these trades can get it wrong, but with contracts worth up to £100 million it makes it more important that they get it right," he added.
In related news, fresh data from Hometrack shows that Britain's house prices fell for the second consecutive month over the course of November, with the average property cost this month falling by 0.2 per cent across England and Wales.