Average house prices across the UK will drop by 5% next year and will show little convincing growth until 2015, according to the latest forecast from estate agent Knight Frank.
The UK has struggled to emerge from recession and there are fears that the economy may start to shrink once more. This ongoing economic weakness, lacklustre earning growth and public spending cuts will take a toll on the housing market over the next 12 months.
The 5% drop in prices will leave property values nearly 15% below their 2007 peak. In fact, even with the modest gains seen in later years, the agents forecast that average house prices will not hit 2007 levels again until 2018.