House Price Update to 9 December 2009

UK House Prices Situation: Still rising in some areas

UK House Prices Forecast: House prices will flatten or fall in 2010

Halifax Records Another Monthly Rise

The latest Halifax House Price Index shows that the average UK house price rose by 1.4% in November, bringing the average annual change for the last year to -1.6%.

Martin Ellis, Halifax’s housing economist, said that “higher demand has combined with a low level of properties for sale to push up prices.” Ellis said that “our view is that house prices will be flat during 2010”.

Ellis commented that one factor that would affect prices was whether there was a “significant increase in the supply of properties for sale.” In other words, a surge of properties for sale would be likely to result in weaker house prices, as one of the main factors contributing to this year’s rises has been a shortage of good quality houses for sale.

Halifax’s report also noted that housing market activity is still rising – the number of mortgages approved to finance house sales rose for the eleventh consecutive month in October. Figures from HM Revenue & Customs show that completed sales have risen dramatically in 2009, too – from 41,000 in January to 90,000 in October.

2010 – More House Price Predictions

Economists like nothing more than making predictions – so here are some of the latest housing price forecasts for 2010.

Speaking to the BBC, Jonathan Davis of financial planners Armstrong Davis believed that house prices will fall by another 10%-15% in 2010. He thinks that this year’s good news has largely been a result of the government’s extensive economic stimulus packages, without which “there’s nothing holding up the economy.”

Commentators also pointed to continuing tighter mortgage lending as an important factor in limiting house price growth. According to the BBC, “most first time buyers still need to put down a 25% deposit”.

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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