House prices ‘to reduce by 25%’

Graham Beale’s forecast for the housing market

The chief executive of the Nationwide Building Society has told BBC News that he thinks house prices could fall as much as 25% from their peak.

Robert Peston, BBC business editor, BBC News - 8th Sept 08

This prediction implies that 2.5 million homeowners could be pushed into negative equity.

Graham Beale also said he does not expect to see signs of recovery in the housing market until 2010.

Nationwide is by far the UK’s biggest building society and is closer to the housing market than many others.

Over the course of the business cycle it provides slightly fewer than one in ten of all the mortgages in the UK - though its recent share of new home loans has been a bit less.

So Nationwide’s chief executive, Graham Beale, carries weight when prognosticating.

What he said in an exclusive BBC interview on Monday is that he does not expect the housing market to show signs of recovery till 2010.

“I think we are into 2010 [before we see signs of recovery],” Mr Beale said.

“I think that next year we will see a similar pattern to this year…we will see further falls in house prices. And I think before we really get to the new world, whatever that is, I think we will be into 2010.” Full Article