Researchers predict 20% UK house price fall

British house prices are set to fall by 20% during the next three years as the booming UK property market corrects itself, a research group has claimed.

Capital Economics said it expects prices to rise by a further 5% to 6% by the end of this year before beginning to fall at the beginning of 2005.

The group said it thought this gloomy scenario was now the most likely outcome for the market as property had become overvalued.

Ed Stansfield, property economist at Capital Economics, said: “There is an awful lot of variation in opinion about whether and how much prices will fall but our central forecast is that they will fall by 20%.”