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Written by rosalind renshaw

City forecaster Morgan Stanley has said that Britain’s housing market is set for a double dip, while Deutsche Bank said that UK house prices remain ‘precariously high’.

US investment bank Morgan Stanley is forecasting that UK house prices will fall by 7%-18% by the end of next year.

Its UK economist Melanie Baker said: “Affordability looks stretched and house prices look over-valued. We don’t think that a weak recovery in supply is enough to prevent a double dip.”

George Buckley, an economist at Deutsche Bank, warned house prices could fall more sharply next year when interest rates rise. He argued that UK house prices had fallen much less than in the US and that they remained precariously high.

Meanwhile, Hometrack reported this morning that house prices have fallen across every region in England and Wales.

Hometrack said it was the first time this had happened since April 2009.

The fall, of 0.4%, is for the third successive month. Reporting for September, Hometrack said that in the last three months the volume of buyers registering with agents has dropped by 6.5%.

The survey of 5,100 agents also shows that properties are taking longer to sell, at 9.3 weeks.

Hometrack director of research Richard Donnell said that the “repricing” process would stretch well into next year.

But he said: “Talk of a double dip, with the implication that the market will see double-digit house price falls, is overdone despite the weak outlook for demand.”

Hometrack puts the average house price at £157,600.


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