House prices likely to fall in 2010, says Knight Frank
Edited by Andy Jowett.
The growth in UK house prices seen over the last seven months is "unsustainable" and residential property
values are likely to fall back next year, according to one industry analyst.
Liam Bailey, head of residential research at property consultancy Knight Frank, said prices have been supported in recent months by low interest rates, a limited supply of homes for sale and an increase in confidence following the improvement in economic conditions compared to last year.
However, he warned that growth is unlikely to continue beyond the end of this year because despite the easing of the recession, there are still "quite a few reasons why the economy should be under pressure" in 2010, which will make household finances "fairly tight".
Mr. Bailey said unemployment is still rising and there are also likely to be tax rises as the government attempts to rein in the public deficit.
Nevertheless, he noted that the market should avoid "massive price falls" because interest rates and inflation are unlikely to increase significantly in the near future.
According to the Department for Communities and Local Government, the average UK house price stood at £196,510 in August 2009.