The Nationwide and Halifax indices show that house prices are now almost 20% below their peak, meaning that there is still some way to go before our forecast of a 35% peak-to-trough fall is delivered. Yet, the chances that prices ultimately fall by more than 35% have increased in recent weeks as the economic downturn has gathered pace. Accordingly, we are cutting our forecast to a 40- 45% peak-to-trough fall. We expect house prices to drop 20% this year and a further 10% in 2010.
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