House Prices 'to Fall for 2 years'

Property prices are likely to continue falling over the next two years, according to Sir Win Bischoff from Citigoup.

The chairman of one of the world's largest banking groups has warned that house prices in the UK and the US may decline even further as both countries look to "stabilise" their economies. The expert also suggests that the credit crunch will continue into 2009.

In an interview with the BBC Sir Win explained: "I am a great believer that over a period of time there is a reversion to the mean, which would suggest that house prices have further to fall."

He added: "I think that it will take some time - two years perhaps - until the markets stabilise. We certainly think that in certain areas of the United States it will take that long."

Meanwhile, Axa has predicted that some homeowners in the UK could see their houses drop in value by as much as £40,000 before the end of the year. The Axa Taskforce suggests prices will fall by an average of 12.9 per cent, with some consumers facing a drop of over 18 per cent.