House prices will fall this year

A fall in house prices may lead to a weaker economic recovery. The value of homes in Britain may fall this year and increase slightly in 2012. UK house prices could fall by 1.7% this year as household earning power becomes weaker, according to the findings of a research organisation. The Centre for Economics and Business Research (CEBR) has predicted that higher inflation and fewer employment prospects for 2011 mean that the economic recovery will remain fragile. In turn this may lead to a reduction in house prices and therefore a slower recovery in the long term.