House prices could fall in Britain by as much as 10 per cent in the coming year, the world's leading economic authority has warned.

 

Britain is heading for a decline in the housing market similar to that witnessed in America, while the number of people having their homes repossessed could double as mortgage costs rise, the International Monetary Fund claimed.

 

Against a backdrop of a 180 per cent rise in house prices over the past decade, George Osborne, the shadow chancellor, accused the Government of allowing a "debt bubble to grow in Britain" which is now beginning to burst. Mortgage lenders are responding to the global credit crunch by tightening up conditions for loans and raising the cost of borrowing.

 

How worried are you about falling property prices? Was the market overdue a correction? What, if anything, can the Government do to cushion the effect of higher mortgage costs on stretched family budgets? Would a 10 per cent fall in prices be enough to help struggling first-time buyers get on the property ladder?

 

Is the chancellor, Alistair Darling, correct to remain optimistic about the state of the British economy?

 

Source: Sunday Telegraph

the market may well be corrected but long term, as long as the population is growing, house prices will rise.

I fear how much my first house is going to cost.