House prices to decline sharply despite recent rally, warns Fitch

RECENT rises in UK house prices are likely to be reversed next year, ratings agency Fitch said yesterday.<br /><br />The firm said it expected a rapid decline in house prices to a trough of 30 per cent below the peak of October 2007, despite the 1.6 per cent rise recorded by home lender Halifax in September.<br /><br />Prices are currently around 13 per cent below the peak, despite three consecutive monthly rises, Fitch estimates.<br /><br />Brian Coulton, head of global economics at Fitch, said: &ldquo;The UK&rsquo;s average house price-to-income ratio remains significantly higher than the long-term average.&rdquo;<br /><br />&ldquo;A 30 per cent fall from the peak of October 2007 would bring this ratio back in line with the long-term average,&rdquo; he added.