House prices will stay in the doldrums for years

Britain’s housing market will stay in the doldrums until the middle of the next decade, and there is a 30 per cent chance that prices will take until 2020 to return to their peak before the crash, a consultancy firm predicts. PricewaterhouseCoopers said recent signs of a recovery in the market which had been detected by a fresh survey of estate agents were a ‘false dawn’. John Hawksworth, the chief economist at PWC, said prices would experience a gentle decline for the next 18 months and then pick up slowly over the following years. ‘Although the estimated average UK house price overvaluation of around 25 per cent in mid-2007 has now been largely eliminated, our analysis suggests that house prices could still have further to fall over the next year.’ He added that house prices were likely to fall by a further 5-10 per cent.