Property market recovery could take 15 years

28 2008
The head of a leading mortgage packager has revealed his belief that the property market could take up to 15 years to recover.

Nationwide, the UK's biggest building society, published figures in April showing that house prices fell for the sixth consecutive month.

Now Paul Holmes, CEO of Firstrung, has claimed that prices could drop by up to 30 per cent over the next five years, and that it would subsequently take a decade for them to return to the levels of the previous boom.

He said: "I think the recovery of house prices, if you can call it such a thing, will take 15 years because average wages have to catch up to house prices.

"House prices over the last few years have not been driven by supply and demand but by the availability of cheap credit and that cheap credit has now gone.

"Now it's about the one fundamental which underpins the market, which is affordability."

Holmes also added that wages have barely risen beyond inflation over the past ten years, while house prices have soared consistently above that level.

The Land Registry reported in April that house sales between September and December 2007 were down to 90,880 per month compared to 117,301 for the same period last year
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