Since our last update on house price predictions for 2009, the
stock market and banks have gone through a rough patch, to
say the least. So, where does that leave the housing market?
Here, two leading estate agents give their views on what will
happen in 2009.
By Lucy Searle
According to Kinleigh Folkard & Hayward, the number of property transactions will be halved in 2008, and selling prices are now in excess of 20 per cent less than their 2007 peak. By early 2009, they estimate that property values will reduce by a further four to five per cent. However, they assert that in 2009 and 2010 there will be little movement in values.
Lee Watts, managing director, says that the problems this year are as a result of irresponsible lending. 'In 2007, the Land Registry reported a total of 1.2 million sales transactions in the UK. In 2008, I believe that this figure will be halved. The current market conditions have been brought about by too much money being irresponsibly available over recent years, leading to property prices overheating. This has now been compounded by insufficient money being available, combined with a widespread lack of confidence in the government and financial institutions.'
'Based on our experience across the London market place, property selling prices today are in excess of 20 per cent less than at their peak in the spring/early summer of 2007. Some institutions and commentators have announced falls of between nine and 12 per cent, but I would say based on London alone, these figures are wildly inaccurate.'
'To illustrate, our exchange results for September 2008 reflect that average property selling prices in London were over 14 per cent less than asking prices, and asking prices have already come down by 10 per cent over the last year.'
Watts continues, 'I believe property values will reduce by a further four to five per cent and we will see this adjustment achieved by early 2009, with very little further movement in values during the remainder of that year and through 2010.'
'People will always need to move, and as we progress into 2009, I predict we will see a change in the supply:demand ratio for property, and albeit slowly, with increasing levels of activity and transactions as the year progresses.'
'In 2009, I suggest that we will see a 15 per cent increase in UK sales transactions compared with 2008. Based on my forecast that there will be 600,000 sales transactions in 2008, this reflects a total of 690,000 transactions in 2009 – still 44 per cent less than in 2007.'
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For a fuller assessment of what house prices will do in 2009, click here >>
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