According to the Times Online, if the cost of home loans fell by a further half-point, the current worsening housing market situation could be over as soon as next year

Morgan Stanley’s chief UK economist, David Miles, said that if mortgage rates stayed at present levels, an educated guess from sophisticated economic estimates was that house prices would fall by another 5 to 10 per cent and wipe a further £17,000 off the value of an average home before the market bottomed out next year.

However, Professor Miles, who previously has advised Gordon Brown, added that if a recent decline in the cost of mortgage funding continued, price falls could soon end.

Speaking to the Treasury Select Committee, he said: “If the cost of funding to lenders were to move down half a point, then the 5 to 10 per cent fall could turn into a much smaller number, or not much at all.”

To read the full article, click here.

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