When property prices reach rock bottom, as they are expected to do in 2009, bargain hunters will be ready to buy and this could start the cycle that leads to another slump in 15 to 20 years time, according to the UK Housing Review.
Analysts predict that the first quarter of 2009 will see some of the steepest price falls so far. Then cash buyers 'queuing in the wings' of the market waiting to pick up bargains will move into action. 'All the bargain hunters could lead to the 2020s overheating,' said Yolande Barnes from Savills, adding that property cycles are almost inevitable – arriving every 20 years or so.
But the state of the UK property market is not as desperate as in the US. 'In the US, one in 16 households face repossession. In the UK it is one in 200 households,' she explained.
In the mortgage market she noted some subtle changes. 'We are going back to a monopoly of mortgage supply. It is a situation people are competing to be borrowers, and not lenders competing for borrowers,' she said.
Meanwhile Professor Michael Ball from the University of Reading is not upbeat about the property market in the UK.
'If the housing market was a person it would be diagnosed as bipolar. I am extremely pessimistic about where the finance will come from. Banks were rescued at a big cost and problems will persist for a long time,' he said.
He is also predicting more price falls in 2009 as people who have put off selling cannot do so forever.
