U.K. Home Prices Will Drop Through 2012, Capital Economics Says

U.K. house prices will fall through 2012 as the deepest public-spending cuts since World War II and tighter credit conditions deter potential buyers, Capital Economics Ltd. said.

Home values will drop 5 percent this year and 10 percent in each of the next two years, economists including Roger Bootle and Ed Stansfield said in a note issued to clients this week. The 2012 forecast “is highly uncertain,” they said.