House Price Update to 25 November 2009

UK House Prices Situation: Positive year-on-year growth for 2009

UK House Prices Forecast: Falls expected in 2010

House Prices Won’t Recover Until 2014?

A new survey carried out by financial news specialists Bloomberg has found that many economists expect that house prices will not reach their 2007 peak levels again until 2014.

Nine of the fourteen estate agents and economists surveyed said that they expected prices to fall in 2010, with an average drop of 1.6% predicted.

House Price Forecasts: What the Experts Say

There have not been any new house price index reports published this week, so instead this article will look at expert house price predictions for 2010, as recently published in The Times.

The predictions were provided by a variety of people, from estate agents to bank economists. Yolande Barnes, head of residential research at estate agents Savils, is forecasting a 6% fall in 2010. “There are few signs that mortgage markets will ease over the next 12 months”, she says, which may result in “mortgage-dependent buyers” being unable to purchase in sufficient numbers to maintain current house prices.

On the other hand, Martin Gahbauer, Nationwide’s Chief Economist, expects no change overall in 2010 – “I cannot see house prices moving by any considerable degree in either direction.”

It’s not all negative, however. One of those interviewed, Michael Saunders, is an economist at Citi, a bank. His forecast is for annual growth in 2010 of 5%-10%, driven by low interest rates, “improvements in affordability” and “a rise in mortgage loan-to-value (LTV) ratios”.

Since all of these predictions are different and some are direct opposites, it seems impossible to form a sensible conclusion from them. The balance of sentiment in the industry seems to be that prices will fall next year, but this is by no means certain.

Read about UK House Price indexes / key statistics that track the ups and downs of house prices

Read our take on the Credit Crisis the effect on UK House Prices and Mortgages. A Special Report

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