It’s a nervous time for many people involved in the property market. So nerve wracking in fact, that many of the companies that normally predict what’s going to happen to property prices in the next 12 months – haven’t.
By Kate Faulkner
The problem for many forecasters at the moment is that few expected the property market to stabilise this year, many thought prices would continue to fall (not us though!). However, not only have prices stabilised, we are even seeing small price rises in some areas where demand is higher than supply. Add into the mix that the economic predictions are also giving confusing messages, with some saying we are heading out of recession while others are saying this is just a blip and we will fall further into recession over the coming months.
So who is giving forecasts for 2010 property prices and beyond, and are they likely to be accurate?
Savills (estate agents) are taking a cautious approach, hedging their bets on what happens in the economy! They predict 2009 prices will finish 7% down year-on-year (ranging from a 6% fall in the South East to a 12% fall in the North East). During 2010 they expect prices to fall in the UK by 3% (ranging from a 2% fall in Scotland to a 6% fall in Wales).
For ‘prime central London’ they predict that if we have no more financial shocks and stock levels continue to match demand, then 2010 will show a 0.6% decrease with 2011 giving an 8% increase. However, if the economy falters and unemployment continues to rise, they believe prices will fall 3.4% in 2010 and then grow by 9% in 2011.
Cluttons (estate agents) predict a 2% fall in 2010 nationally with a 3% increase in central London.
Market Oracle (economists) have revised their predictions for property prices to fall by 3.5% in 2010 and a further fall of 1.5% for 2011, with prices stabilising in 2012.
Capital Economics (research consultants) are predicting that property prices will fall by 10% in 2010 and a further 5% in 2011.
Knight Frank (estate agents) predicts prime London residential property prices will grow by 3% in 2010 and to 9% in 2011. They believe it will take the UK, as a whole, until 2014 to match peak property prices achieved in 2007. This means house prices growing by 21.5% over the next six years.
Overall, the forecasts seem to agree to further falls for 2010, ranging from a 3% fall to 10%.
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