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2010 predictions for UK property

Monday, December 21, 2009

Source: Catherine Deshayes

Matthew Sinclair, Director of luxury property search agent Saint Property, predicts that 2010 will be another difficult year for the housing market...

He said: "I am the last person to be gloomy about the housing market, but we have to be realistic about the position the market is in and the influences from the macro-economic situation. However, on the positive side, for those who are in a position to purchase in 2010 there will be much more choice."

Matthew Sinclair predicts the following trends for 2010:

There is always apprehension when an election is on the horizon, plus the UK has historically high debts. We can expect to see an increase in taxes, an increase in unemployment, particularly job losses in the public sector, as well as pay freezes.  The underlying trend will be one of readjustment on property prices across all sectors of the market.

In 2009, the market has been driven by lack of supply. The second half of 2009 has shown an increase in transactional activity with the deals that have been done being predominantly cash-based. Going forward, buyers will continue to require a significant cash element to make a purchase and get the best deals. Lending has been tight and, whilst easing a little, will remain difficult to obtain.

 The top end of the housing market, with properties costing upwards of £1million, will be hit hard again, and more property will become available. We can expect to see some large properties on the market, some of which hardly ever changes hands, both in terms of residential and rural properties, including farms and estates.   We are already seeing this on a private basis. This is excellent news for purchasers who have specific criteria and have been waiting for some time for suitable properties to come on the market.

There remains a significant amount of top end property still available from the end of 2009 and, again, not all is openly advertised. We can expect to see reductions on these properties going forward.

It is likely that there will be a period where supply outstrips demand and, if interest rates move upwards, that supply will continue to grow. Buyers will have more choice and prices will be more competitive.

We will see further downsizing and debt reduction on a personal level. For those purchasers who are in a position to buy in 2010, this is good news, as it will bring more property on to the available list.

Income generation will be key for 2010.  People will be looking to invest in something that will generate an income. Land and forestry will continue to do well and normally track the gold trend which is always seen as a safe environment for money. However, this will come under pressure with only the best land making good prices.

We predict that there will be more property offered on the market on a private basis. This is a trend we are beginning to see with property being lined up for sale for next year. This is good news for buyers if they have access to this market, for example through a property search agent.

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