House prices 'to crash 20pc by 2012' as Budget bites, says Capital Economics


House prices will crash more than 20pc over the next two years as a result of Government spending cuts, tax rises and a surge in unemployment, according to a leading economic forecaster


Capital Economics, the consultancy led by Roger Bootle, expects house prices to fall 5pc this year, and 10pc in each of 2011 and 2012. In total, the group predicts a collapse in house prices of 23pc from the start of 2010 – a deeper drop than the 19.3pc crash during the recession.

The numbers imply a torrid second half of 2010 as house prices are currently 3pc higher than the start of the year according to Nationwide Building Society, whose figures Capital Economics is mapping


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