Bank chief: House prices could fall 30%

By MoneyhighStreet Staff. Published on December 15, 2008 This post currently has no comments.

Barclays sign
House prices might fall to 30 per cent below their market peak next year.

This is the prediction of Barclays chief executive John Varley, made in a Sky News interview.

The bank chief also said that mortgage lending practices in the UK prior to the onset of the credit crunch last year were "madness" and that financial firms should say "sorry" for their part in the downturn.

Figures from Halifax and Nationwide suggest that house prices have declined by around 15 per cent over the past year.

Mr Varley suggested that this decline could be matched over 2009.

He commented: "Our view was that from the top to the bottom, you would see a fall of something like 25 to 30 per cent.

"I suspect we''re about halfway through that at the moment."

Analysis from economic group the International Monetary Fund has indicated that UK property was as much as 30 per cent overvalued at the height of the boom in 2007.