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End of UK price rally?

Wednesday, December 23, 2009

Source: Catherine Deshayes

Bank of England economist, Kate Barker, believes the recent house price gains will not be sustained in 2010...

Her comments come as many leading property experts are also predicting an end to the recovery in house prices this year.

In an interview with Bloomberg, Ms Barker said: "I would see next year probably as a year where activity remains relatively low and possibly prices don't change very much."

Ms Baker, who is a former housing adviser to the Government, added that she was surprised by the strength of the housing market this year.

"There are still more buyer inquiries than there is stock of housing coming on to the market. The market has remained surprisingly tight," she added.

Her comments came prior to the Council of Mortgage Lenders (CML), who announced a fall in mortgage lending for the month of November.

According to the CML, UK mortgage lending fell by 10% in November compared with October and was the lowest level since May.

Furthermore, last week the National Association of Estate Agents (NAEA) revealed that the proportion of first-time buyers purchasing property in November fell to its lowest level for a year.

According to the NAEA, 19% were first-time buyers in November - down 3% on October and the smallest proportion since November last year.

For some months now, economists have said that a lack of properties on the market have driven activity and prices up but this could change according to many experts.

Finally, the end of the stamp duty holiday could have a negative impact on the housing market, according to many experts.

In September 2008, the Government opted to increase the stamp duty threshold from £125,000 to £175,000 in a bid to revive the housing market. However, the stamp duty holiday is set to end at the end of this month, meaning all properties priced at £125,000 and above will, once again, be subject to the levy.

Source: www.homemove.co.uk