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UK property prices to fall further in 2009

Normally at this time of the year predictions for property prices and market forecasts are published looking ahead to the New Year.

But Halifax and Nationwide are opting out of making house price forecasts for 2009. Halifax says its merger with Lloyds TSB is the reason while Nationwide, Britain's largest Building Society, said it is simply too difficult to make predictions but both will continue to publish monthly forecasts.

'Things are changing so rapidly in the market, which makes it very difficult to forecast. When things have settled down a bit we may be in a position to review this next year,' said a spokeswoman.

A few months ago the Council of Mortgage Lenders also halted forecasts, describing them as 'futile' in the current economic downturn.

Those who are issuing forecasts are predicting further property price falls. Barclays expects a drop of up to 15% during 2009. The Centre for Economics and Business Research is predicting a maximum 20% decline in prices, from the market peak last summer.

Based on this assumption, the average house price will fall to £157,000 by Christmas of next year, at which point prices will have reverted to 2004 levels.

Property researcher Hometrack has predicted a 10% fall in 2009. 'The onset of recession and the prospect of rising unemployment over 2009 will continue to damp confidence and in turn demand, which will inevitably lead to further house price falls over the next 12 months,' said Richard Donnell, director of research.

And falls of 12% are forecast by, the UK's longest established property website. It said that the market, already skewed favourably for buyers, would be dominated by bargain-hunters, including professional buy-to-let investors and first-time buyers.