During the next year the value of the average British home may depreciate 19%, or about $1,100 a week, to an unadjusted total of $237,386 by September, and they probably will not recover for a decade, according to the property derivative broker Tradition Financial Services.
Forward contracts suggest that the average home price will fall 38% from its peak in August of last year, to a low of $210,853 by September 2011, Tradition Financial Services, a unit of the Paris financial brokerage Viel & Cie., said last week.
The contracts are pegged to the Halifax House Price Index, which is compiled by the mortgage lending arm of HBOS PLC, the United Kingdom's largest residential property lender.
Peter Sceats, the director of real estate at Tradition Financial Services, said the nationalization of the mortgage lender Bradford & Bingley and the government-brokered plan to sell HBOS to Lloyds TSB Group PLC generated "an unprecedented markdown in values" of derivatives last month.
"People are thinking that the economic downturn will be deeper and longer than they thought," Mr. Sceats said.