UK house prices will keep rising through 2010

* Whilst mortgage lending remains tight, conditions have improved substantially since the worst of the crisis and lending continues to edge up;

* Base rates will remain at historic lows in 2010 making mortgages relatively cheap, albeit with post‐credit crunch loan‐to‐value rates and higher risk premia;

* Economic output has weakened considerably over the last year. We now expect modest growth of 1.2% in 2010;

* Finally, the supply side of the market will remain tight into the medium term.  The current shortage of property on the market may be causing short-term supply issues, but in medium term, the current shortage of new house‐building will also come into play.

Robert Bartlett, Chesterton Humberts CEO, said: "The CEBR’s research supports our belief that the property market will experience a fractured but sustainable recovery, with the London market continuing to increase more rapidly than other areas.

"The monthly Chesterton Humberts/CEBR House Price Poll of Polls is also demonstrating that the price of the top 20% of properties by value is continuing to increase more rapidly than lower value properties.

"While rising unemployment and weak wage growth will certainly temper house price growth next year, growth will continue, especially in London where Sterling’s weakness against the Euro continues to make UK property an attractive investment for cash rich foreign investors. For those living in areas of relatively stable employment, many now have considerably greater disposable income than just a year ago, and are now taking advantage of the historically low mortgage rates to secure their housing needs.

"Looking beyond the end of 2010, we have an Olympic Games in Britain in 2012, another factor which is likely to keep demand for property strong in the two years leading up to that event."

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0 thoughts on “UK house prices will keep rising through 2010

  1. omari@lineone.net

    This is wishful thinking and I totally disagree with the information presented.
    The interest rate is not likely to remain ‘historically low’ as the article predicts, the interest rate is more likely to go up which will in effect cause the property prices to reduce.
    Any current house prices increase, is very fragile and unsustainable and only caused by demand from property owners downgrading and cash rich buy to let investors.
    There’s no foundation yet for any property price increase, since the unemployment figures are on the rise, low wages, higher inflation in fuel prices.
    The current property prices are still overvalued and they would probably require another -15&#xto; -20% adjustment to their current values.