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 House prices in London could drop by up to as much as a quarter before the end of next year, according to a leading estate agent.
In their gloomiest forecast to date, Savills claimed on Tuesday (June 24th) that the capital could witness falls of 25 per cent, while also experiencing dramatic decreases in new-build figures.
The news has led the company's director of residential research, Lucian Cook, to describe the current situation as a shift from "credit squeeze to credit crunch to credit crisis".
He said: "The housing market has moved from being in slowdown to downturn. The risk of a far more severe correction cannot be ignored.
"The driving force behind these falls has been the ongoing credit crisis, which has significantly reduced accessibility to mortgage finance and prevented recent base rate cuts from being passed on to the consumer.
"This has occurred against a backdrop of a weakening outlook for economic growth and reduced buyer confidence."
Savills had previously commented that they expect prices in London to fall by ten per cent this year and four per cent next year.
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