Barclays has warned that house prices could drop eight per cent over the next year, rising to 20 per cent by the end of 2006.
"People say that house prices can adjust gradually, but I would be very surprised if that happened," Christopher Smallwood, Barclays chief economic adviser, told the Sunday Times newspaper.
The Royal Institute of Chartered Surveyors (RICS) has said that more of its members are reporting falling prices than at any time since 1992, but seemed to rule out a crash.
"Buyers are still nervous, which is not surprising given the quick-fire interest rate rises over the summer," noted Jeremy Leaf of the RICS.
"But the professionals on the ground believe that confidence will not deteriorate further over the coming months as the underlying factors, jobs and the wider economy, remain stable," he added.To read more about UK property, click here.
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