LONDON (Reuters) - House prices could register annual falls of 5 to 10 percent this year and the government does not know how bad it will get, according to briefing notes for housing minister Caroline Flint.
A spokesman for her ministry, the Department of Communities and Local Government, confirmed a photograph of her notes for a Cabinet meeting on Tuesday posted on the BBC Web site was genuine.
“We can’t know how bad it will get,” the notes said. “But we need to plan now to put in place effective measures against the risk that it does get worse and to prepare for the upturn.”
“Given present trends, they will clearly show sizeable falls in prices later this year — at best down 5-10 percent year-on-year,” the notes said, referring to leading house price indices.
The spokesman said forecasts of a fall in house prices contained in the notes were not government figures but simply referred to what external analysts and leading house price indices have already said.
“When looking at trends in the market, it is important to remember that UK house prices are 45.5 percent higher than five years ago,” he said.
On the photograph more generally he added: “This is a partial and therefore misleading account of the notes.
“The notes make clear that the fundamentals of the economy are sound with high employment and low inflation but as everyone knows the market is being affected by the global credit crunch.”
He said it also made clear a comprehensive strategy is in place and the Government will continue to monitor the situation and take appropriate action.”
The notes also showed Flint planned to announce new measures to help first-time buyers on Wednesday.