The forecast for UK house prices is very depressing

While the National Institute of Economic Research has today issued a report regarding the UK property sector, with a forecast that house prices will fall by 8% in real terms by 2015, this is not the worst forecast currently in the marketplace!

A report by Capital Economics today forecasts that the UK property market could fall by up to 25% over the next two years wiping off almost £42,000 from the value of the average home in the UK. Despite the fact that only a few weeks ago there appeared to be hope for the future, with competition returning to the mortgage market, the outlook for the UK property market has down turned after the emergency budget. But are we now in danger of talking ourselves into a property recession?

There is no doubt that negative comments regarding the UK property sector will see more and more buyers waiting by the sidelines as cautious sellers begin to drop their prices and run for the exit door. In this scenario there are very few people who would "jump in with both feet" when the cost of a property tomorrow could be less than the value today. Is there no balance with regards to forecasts for the UK property sector?