THE value of the average British home next year may depreciate by as much as 19 percent, and probably won't recover for a decade, prices of United Kingdom property derivatives indicate.
Forward contract prices indicate the average value of a home may sink to an unadjusted 139,547 pounds (US$238,109) in September 2009 from 173,350 pounds last month, said broker Tradition Financial Services.
Forward contracts suggest average home prices will fall 38 percent to a low of 123,945 pounds in September 2011 from the peak of August 2007, Bloomberg News reported. The index itself has declined 14 percent in 13 months through September.
The contracts are pegged to the Halifax House Price Index, compiled by the mortgage-lending arm of HBOS Plc, the UK's largest residential property lender.
The nationalization of mortgage-lender Bradford & Bingley and the government-brokered plan to sell HBOS to Lloyds TSB Plc "saw an unprecedented markdown in values" of September derivatives, said Peter Sceats, director of real estate at TFS.
"People are thinking that the economic downturn will be deeper and longer than they thought last month," he added.
The contraction of the mortgage lending market has ended a decade of gains that saw UK home prices triple.