Developments over the past quarter have highlighted the downside risks to our house price forecasts. Accordingly, we have cut them. We now think that house prices will fall by 8% this year, rather than 5%. We have also nudged down our forecasts for 2009, from a fall of 8% to a fall of 10%. Taking into account the dip in prices in the final months of 2007 that means that property prices will end next year roughly 20% lower than their 2007 peak. We will flesh out the details of the new forecasts in our new Housing Market Analyst which will be sent to clients later this week.
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