Skip to content

Average annual price rise of up to 2% predicted for UK residential property market in 2010

According to the UK Housing Market Forecast from Royal Institution of Chartered Surveyors
transactions are likely to rise to a monthly average of 70,000 from 55,000 to 60,000 currently.

Supply should continue to increase in the early part of 2010 but will struggle to keep pace with demand providing a platform for further house price rises. Significantly, the inventory of stocks on surveyor’s books still remains close to historical lows, the report says.

However, the narrowing in the gap between supply and demand will gradually begin to exert a greater influence on the market. The on-going caution of lenders, the uncertain economic climate and a flat labour market are all also likely to present challenges resulting in prices finishing the year only one or two percent higher than they started it.
‘The imbalance between supply and demand will continue into the early part of the new year resulting in some further house price gains. However, the combination of more available property and the beginning of the exit strategy from the big stimulus programmes that have helped support the economy will gradually exert a greater influence,’ said Simon Rubinsohn, RICS chief economist.
‘Transactions levels are likely to increase, fulfilling the Christmas wish list of many agents throughout the country but first time buyers are likely to continue to struggle to procure finance from lenders without the help of generous relatives,’ he added.

Meanwhile Bank of England economist, Kate Barker, believes that recent property price gains will not be sustained in 2010. Baker, who is a former housing adviser to the Government, added that she was surprised by the strength of the housing market this year.
‘I would see next year probably as a year where activity remains relatively low and possibly prices don’t change very much. There are still more buyer inquiries than there is stock of housing coming on to the market. The market has remained surprisingly tight,’ she added.