House prices are poised to fall almost a third from their peak last year to reach values last seen in September 2003, says one of the country’s leading estate agents.

Daniel Thomas, Property Correspondent, FT.com – 15 Oct 2008

Knight Frank said on Wednesday that the market was halfway through a price correction, with about 15 per cent already wiped off the price of an average home in the UK. But the expected peak-to-trough decline of about 30 per cent would mean that prices would continue to fall until late 2009.

House prices will take an average of seven years to return to the 2007 peak, says Knight Frank’s research. But prices in central London will rise faster, passing their previous peak by 2012.

Sales volumes are expected to hit their lowest point later this year, when Knight Frank expects transactions will fall to about 30 per cent of their long-term average. The agent said the market would pick up next year with hopes that sales volumes would recover to about 60 per cent of their long-term average by the second half of 2009.

“Our forecast suggests that we will be closing in on the bottom of the market during late 2009-early 2010,” said Liam Bailey, head of residential research at Knight Frank. Full Article