House prices expected to fall 10 percent

LONDON (Reuters) - House prices will fall about 10 percent in 2009 with risks skewed to the downside, the Royal Institution of Chartered Surveyors said on Wednesday, resulting in a peak-to-trough drop of at least 25 percent.

The credit crunch has hit the once-booming housing market hard, with prices falling at the fastest rate since at least the recession of the early 1990s as banks tighten up lending following a decade in which prices trebled.

"Lenders are likely to remain cautious in the near term. This, coupled with an increasingly gloomy economic picture, suggests that house prices will continue to decline in 2009," RICS chief economist Simon Rubinsohn said.

However RICS expects sales to pick up next year, with a greater availability of mortgage finance key to converting rising new-buyer inquiries into higher sales.

(Editing by Stephen Nisbet)