House prices could fall by 36% over the next two years
There has been a damning report released today with regards to the housing market in the UK and the potential for further falls over the next two years. Using instruments traded on the property derivatives market the indication appears to be a potential fall of up to 36% in house prices over the next two years. While this is some way ahead of many expectations in the marketplace it has caused some consternation amongst investors.
The 36% fall in house prices would be nothing short of catastrophic for the UK economy and it would appear that traders on the property derivatives markets are factoring in a worst-case scenario. Whether this worst-case scenario actually occurs is debatable but many are taking this as a wake-up call for the next two years. There may be some astute investors who will use the apparent oversold position to possibly acquire derivative investments at a relatively low-level.
At the moment it seems that one piece of good news in the housing market is followed by three or four damning reports and just when sentiment appears to be settling down many investors get spooked by figures such as the above.
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