Forecasts for the housing market range from sustained growth to a heavy fall in 2010, underlining the uncertainty over the economic outlook and how it could affect demand for homes this year.
With worries over further economic difficulties and a rise in interest rates, the more cautious commentators range from leading economic consultancies to some of the big estate agencies, although several bank economists are more hopeful of a sustained recovery.
The most bearish forecast has emerged from Capital Economics, the consultancy, which expects house prices to fall by 10 per cent in 2010.
It said the housing market recovery faced considerable obstacles. "Not only is the mortgage credit squeeze still inhibiting demand, but unemployment is still rising ..."
This view tallies with that of Henry Pryor, a housing expert, who also predicted that prices would fall by about 10 per cent in the face of worsening economic conditions.
"I can see prices sliding by more than 10 per cent. The economy is in a shocking state."
Modest dip
Some of the big estate agencies predicted a more modest dip in prices. Savills said values could fall by 6.6 per cent in 2010.
Hometrack, the property consultancy, predicted that house prices would fall one per cent in 2010, saying that while economic growth was expected to pick up in 2010, rising unemployment and slow growth in household incomes would act as a drag on demand.
—Financial Times
