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House prices 'will keep falling' House prices 'will keep falling'
(about 11 hours later)
House prices in the UK and the US are likely to fall for another two years, the chairman of one of the world's most powerful banks has warned.House prices in the UK and the US are likely to fall for another two years, the chairman of one of the world's most powerful banks has warned.
Sir Win Bischoff of Citigroup told BBC Business Editor Robert Peston he expects it will take two years for the markets to "stabilise".Sir Win Bischoff of Citigroup told BBC Business Editor Robert Peston he expects it will take two years for the markets to "stabilise".
Sir Win also expected the credit crunch - fraught conditions in financial markets - to continue through 2009.Sir Win also expected the credit crunch - fraught conditions in financial markets - to continue through 2009.
Citigroup lost $2.5bn (£1.25bn) in the three months to the end of June 2008.Citigroup lost $2.5bn (£1.25bn) in the three months to the end of June 2008.
The figures were less than analysts had been expecting.The figures were less than analysts had been expecting.
Nonetheless, the announcement took cumulative losses at the bank - until recently the world's largest - to $17bn (£8.5bn) over the previous nine months.Nonetheless, the announcement took cumulative losses at the bank - until recently the world's largest - to $17bn (£8.5bn) over the previous nine months.
Sir Win told the BBC that there would be redundancies at the bank, which employs 12,000 in the UK - some of them compulsory.Sir Win told the BBC that there would be redundancies at the bank, which employs 12,000 in the UK - some of them compulsory.
FROM THE TODAY PROGRAMME More from Today programme Our correspondent said the remarks by Sir Win, who chairs one of the largest consumer banks in the world, carry weight.FROM THE TODAY PROGRAMME More from Today programme Our correspondent said the remarks by Sir Win, who chairs one of the largest consumer banks in the world, carry weight.
Citigroup is shedding assets and cutting costs by shedding staff to cope with the new financial conditions.Citigroup is shedding assets and cutting costs by shedding staff to cope with the new financial conditions.
The interview will be broadcast on the BBC News Channel at 2230 BST, in the first of a new series of interviews with business leaders, called Leading Questions. The interview was broadcast on the BBC News Channel at 2230 BST, in the first of a new series of interviews with business leaders, called Leading Questions.
Sir Win's warning comes against a backdrop of gloomy forecasts elsewhere.Sir Win's warning comes against a backdrop of gloomy forecasts elsewhere.
One of Britain's major mortgage lenders, Halifax, has also claimed that house prices are falling at their fastest rate since the 1990s house price crash.One of Britain's major mortgage lenders, Halifax, has also claimed that house prices are falling at their fastest rate since the 1990s house price crash.
During the past year it said properties had lost 6.1% of their value.During the past year it said properties had lost 6.1% of their value.
But the credit crunch has made it difficult for buyers, especially first-timers hoping to get on the property ladder, to get a mortgage.But the credit crunch has made it difficult for buyers, especially first-timers hoping to get on the property ladder, to get a mortgage.
'Rent first, buy later''Rent first, buy later'
This has spurred Halifax and other major lenders including Nationwide and Abbey to announce some cuts in mortgage rates to try and help existing borrowers.This has spurred Halifax and other major lenders including Nationwide and Abbey to announce some cuts in mortgage rates to try and help existing borrowers.
The Royal Institution of Chartered Surveyors, which records the numbers of people moving house, says the figures are at their lowest level since they started collecting the data in 1978.The Royal Institution of Chartered Surveyors, which records the numbers of people moving house, says the figures are at their lowest level since they started collecting the data in 1978.
Last week Housing Minister Caroline Flint announced a series of government measures to try and combat the problem.Last week Housing Minister Caroline Flint announced a series of government measures to try and combat the problem.
These include a "rent first, buy later" scheme for some in England whose household earnings are less than £60,000.These include a "rent first, buy later" scheme for some in England whose household earnings are less than £60,000.