Rics downbeat on housing market

24/12/2008

Bad news for people struggling with their mortgage payments - the housing market will remain "depressed" in 2009.

This is the prediction of the Royal Institution of Chartered Surveyors (Rics), which is forecasting a peak-to-trough fall in house prices of 25 per cent.

Such a steep decline could put hundreds of thousands of Britons into negative equity - where the value of their mortgage is bigger than the value of their home.

In turn, this will make it more difficult for them to secure cheap remortgage loans, putting pressure on their budgets and making it more likely that they would miss repayments.

Rics' new report also shows that mortgage approvals numbers are 64 per cent lower than they were this time last year.

The organisation's chief economist Simon Rubinsohn said: "Lenders are likely to remain cautious in the near term in the absence of any ‘guarantees' on mortgage backed securities.

"This, coupled with an increasingly gloomy economic picture, suggests that house prices will continue to decline in 2009."

Tags; Housing Debt and Bills, Young Family Finances,

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