House price crash fears to the end of decade

Over half of homebuyers fear the UK property market slump will last two years or more.

While 33 per cent of those questioned in a poll by FindaProperty.com speculated the malady would persist for one to two years, others were far less optimistic.

Some 32 per cent of buyers assumed the present downturn – which has seen prices fall 4.4 per cent year-on-year according to Nationwide - will continue for up to two years.

Moreover, 20 per cent thought the market turmoil could last longer still.

When asked how far prices would fall from their 2007 peak, opinion was divided among potential homebuyers.

While 26 per cent forecast house price falls of five to ten per cent, a further 33 per cent forecast a drop of ten to 15 per cent.

A more pessimistic 24 per cent of respondents felt the drop would be in the 15 to 20 per cent range; while a particularly gloomy 12 per cent of buyers predicted that their property's value would fall even more than this.

Last week HBOS - which owns the UK's largest mortgage lender, Halifax - predicted prices would fall nine per cent over the course of 2008.

However, when asked for their prognosis of the market five years from now, buyers believe a significant recovery will eventually occur

Up to 53 per cent of would-be buyers predicted house prices would rebound and be more expensive than they were at their 2007 peak - with 28 per cent arguing levels would recover to the same point.

Only 19 per cent thought they would be cheaper.

"The figures here make very interesting reading. The majority think house prices will fall by ten to 15 per cent and on average feel that the current problems will last around a year or two," said Michael O'Flynn, content editor for FindaProperty.

"More significantly, buyers are confident about the medium to long-term picture.

"Most think prices will be more expensive five years from now, which suggests people still have faith in the housing market and view it as a good investment," added Mr O'Flynn.

"This view is borne out by historic evidence - house prices have fallen on very few occasions in the past and the market has always recovered and made good the."

Chris O'Toole