Housing slowdown could force 30% price rise

Falling output from housebuilders could cause house prices to soar by 30% between 2009 and 2012.

A report by the Centre for Economic Business and Research said property prices would rise if the mortgage market returns to normal in 2009.

The report states: “The rapidly declining confidence in the housing market is having an impact on building – we expect completions to fall by 20% in 2008.

“This will lead to an undersupply of housing over the medium term which will aid recovery in prices.”

According to the Daily Telegraph, the report also states completion of new-build homes will fall by 20% this year and again in 2009.