Bank of England will ensure house prices do not crash

13 October 2004
The annual Housing Futures report has announced the UK will avoid a crash in the housing market in the next few years.

Despite admitting that it expects to see the market fall from peaks during early 2005, the report has confirmed many experts' predictions that the drop will not result in a collapse of the market as happened in 1989.

The report published by the Centre for Economic and Business Research (cebr) anticipates higher prices in late 2004 and early 2005 compared with its June estimates, but has not changed its forecast for 2008.

Those changes mean there is likely to be a fall of about £10,000 in the price of an average home between the highs of 2005 and the lows in late 2007.

cebr claims the housing market in the UK is buoyed by a shortage of supply and by increasing demand.

The group believes these factors, together with the fact that the Bank of England's Monetary Policy Committee (MPC) should be desperate not to repeat the early nineties depression, will work to prevent any greater fall than an average of £10,000.
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