Glut of repossessed houses could depress prices ‘by up to 25%’

House prices will slump further if pressure on the banks to step up repossessions leads to a flooded market.

One analyst warned that the growing mood for action on mortgage-holders with long arrears could see property values plummet as much as another 20%.

Others said a phased rise in repossessions was the key to limiting impact on prices, but they differed on whether prices should be allowed dictate policy.