LONDON, May 6 (Reuters) - The average cost of a British house is expected to sink by 14 percent over the next year and prices could take a decade to return to 2007 highs, property derivative brokers said on Tuesday.
Average prices are expected to drop by 26,000 pounds ($51,070) in the next 12 months, having already fallen by 5 percent since the market peaked in August, derivatives prices showed.
Dealers said Britain’s residential property derivatives market was also now projecting an 18 percent drop over two years in the non-seasonally adjusted Halifax house price index (HPI). (To see current and historic derivatives prices double click [ID:nL06432135]).
They said the market had been marked down due to a slump in mortgage approvals and housebuilder shares and after data last week showed UK house prices in April fell at their fastest yearly pace in 15 years.
Halifax, which is owned by Britain's biggest mortgage lender HBOS Plc HBOS.L, said seasonally adjusted average UK house prices fell by 1.3 percent last month to 189,027 pounds.
According to data from interbank broker Tradition, it could take more than a decade for average house prices in the UK to retest last August’s non-seasonally adjusted high of 201,081 pounds.
In the 10 years from August 1997, UK house prices rose on average by 191 percent, a spokesman for Halifax said. (Reporting by William Kemble-Diaz; Editing by David Cowell) (See www.reutersrealestate.com for the global service for real estate professionals from Reuters).
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