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House price fall predicted

House prices will fall significantly in months to come, a new poll from Reuters suggests.

There is a 78 per cent chance of a drop in costs, according to the 30 housing market experts consulted for the poll by the news agency.

This is an increase of 13 per cent over the previous month's study - and is a sign of the deepening gloom surrounding the UK housing and home loans market.

Owning a property that is losing value makes the remortgage of a home more difficult - and opens up the nightmare possibility of becoming trapped in negative equity by householders.

Last October, experts agreed that there was a 30 per cent chance of a house price fall, Reuters reports.

Commenting on the findings, Bank of America economist Matthew Sharratt said: "Tightening credit conditions, weak purchasing power and a softening labour market will all prevent a resurgence in house price inflation."

Last week, Nationwide's monthly house price survey found a 0.6 per cent drop in property prices - dragging the annual rate of inflation down to just 1.1 per cent.

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