Cantor Spreadfair has produced its first House Price Confidence Index based not on where prices are now, but where their betting clients predict they will be by December 2010.
The bets are based against Halifax's quarterly House Price Index, which recently revealed a steep -2.5 per cent decline in March's prices, taking the current average to £191,556.
As a result, spread betters are less optimistic in April than they were last month, predicting that by December 2010 the average house price will be £160,000.
This marks a fall in the average house price of -15 per cent from current levels and is the gloomiest forecast betters have predicted so far.
Back in January, they had guessed that the average price would drop to £169,000 by the end of 2010, but their views had rallied by March to £173,000.
Obviously, the recent substantial drop recorded by Halifax has made the betting folks at Cantor Spreadfair more than a little jittery.
London Forecast Worsens
Despite Halifax recording a quarterly increase in the average London house price, from £300,318 in Q4 2007 to £304,781 in Q1 2008, the forecast for falling prices in the Capital actually intensified over this time.
In the final three months of 2007, the money was on bricks and mortar averaging £265,000 by December 2010, which would represent a -12 per cent decrease on Halifax's then average.
However, by the first quarter of 2008, betters believed prices in London would fall even further, averaging £250,000 by the end of 2010, equating to a decline of -18 per cent.
Nick Sproule, Head of Key Accounts at Spreadfair, comments: "Although Halifax reported that some of the biggest house price rises were in Greater London, we have seen some weakness and instability come back into the Greater London market.
"The news that First Direct is overflowing with applications, and will not be taking new ones has scared the market a bit. Clients are very much 'wait and see' at these levels.
"Changes in Buy-to-Let CGT rules may also have an impact on prices."
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