Housing crash bets are off

Betting exchange service Cantor Spreadfair has revealed a shift in confidence among its clients, with most saying that a housing market crash is unlikely.

In January, Spreadfair bettors predicted that the average UK house price would fall to £181,000 by the end of the year but the same clients have since changed their minds. They now suggest the average price will be £187,000.

This compares favourably with the recent prediction made by David Miles, chief economist at Morgan Stanley, who says property prices could plummet by 20% in the next two years.

The Halifax house price index claims that the average UK property is currently worth £196,649.

Nick Sproule, head of key accounts at Spreadfair, says: “We’ve seen significant interest from clients who would like to bet on where house prices will be in a year, two and even three years’ time.

“Interestingly, we are seeing a number of clients who made money during the property boom over the past few years re-entering the market.”

He adds: “Others are more bearish and are waiting for the credit crunch to feed its way into prices.”

But a spokesman for the Council of Mortgage Lenders says: “History shows that what punters predict is rarely right. We’re sticking by forecasts indicating that house prices will rise by 1% in 2008.”