Alan Budd: I don’t know how far house prices will fall and I was wrong to have predicted a fall earlier. A fall of more than 10 % would not surprise me at all. The rise in house prices appeared to have little or no effect on the UK economy and the fall may be the same. However there could be effects on borrowing (because of falls in collateral values) and wider loss of consumer confidence. That is why I have mentioned falls in asset values as one of the risks.

Economists Survey

The results in full
Q1: What are the 3 main risks to economic stability in 2008?
Q2: How does the credit squeeze change the job of central banks?
Q3: How deep will the correction be in the housing market?
Q4: How far is it possible to ignore short-term inflationary pressures?
Q5: What needs to be done with the public finances?
Q6: Are emerging economies the next global bubble?
Q7: To what extent will the US election affect the world economy?
Q8: Where will Northern Rock be this time next year?
2007 survey

Howard Davies: in the UK I would expect a 10-15% reduction in prices, possibly quite quickly.