The housing market is heading for a double dip and will take five years to recover, a leading economist has claimed.
Peter Spencer, chief economic adviser with leading financial forecasters Ernst & Young Item Club, said property values would fall by 5 per cent over the next 12 months.
The predictions are based on the Treasury’s own forecasting models a
nd Mr Spencer claims the housing market will remain depressed for years to come because banks are refusing to offer affordable loans to first-time buyers.
Double dip: The housing market will remain depressed for years to come, warns economist Peter Spencer.
He said: ‘We have been very bearish on the housing market for some time. Demand from first time buyers is drying up because there are only so many that can call on “the bank of mum and dad” for a large deposit.
‘What really matters for the housing market is the number of people who can get a decent 80 per cent or 90 per cent mortgage.’
Mr Spencer added that young people were opting not to even try to step onto the property ladder because of the high costs involved.
‘My generation has been planning to sell our houses at over-inflated prices to our children – but many of them are not interested. The game has changed.
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