The latest gloomy housing market forecast has come from estate agents Savills, who predict an overall 25 percent drop in prices.
Estate agency group Savills has predicted no recovery in the struggling UK housing market until 2011.
According to new data from the firm, which specialises in high-end property in London and the south east of England, restrictions on mortgage lending that have come about with the credit crisis will dampen demand for housing for years to come. It also predicted an overall drop of 25 percent in house prices in the current downturn.
In particular, Savills said that the top end of the mortgage market was suffering in the credit crunch - perhaps indicative of the hammering that Britain's financial firms have taken with the financial crisis. With job losses among City bankers running in the five figures, prime central London property was found to have lost 5.5 percent of value over April-June.
Elsewhere, overall demand for homes costing between £1 million and £2 million have dropped by 54 percent over the past 12 months.
Savills made its forecast in its latest residential housing market report.
The new analysis follows the release of several gloomy reports in to the state or the UK economy over the past week. The Organisation for Economic Co-operation and Development said that Britain would experience recession conditions by the end of the year, while Halifax, a mortgage lender, said that house prices had dropped by 12.7 percent over the past 12 months.
This is the sharpest annual drop measured on the firm's index since it began taking data in 1983.
