Kate’s Predictions for 2010

publication date: Jan 18, 2010
author/source: Kate Faulkner, Property Expert and Author of Which? Property Books

Kate’s Predictions for 2010

Many commentators are probably quite nervous about predicting this year’s property movements! And with just cause.

We don’t really know whether the economy will continue to recover in 2010, whether the private sector can improve enough to cover the inevitable drop in investment from the public sector and pending job losses. We also don’t know quite when interest rates will start to increase and although everyone will know who they’d like in government, we don’t really know who it will be, or even if it’ll be a hung parliament causing further confusion.

On top of all this uncertainty, there is the further fear that the pound will slip further against the euro and the all important dollar and how much ‘leeway’ the international markets will give the UK to pay back our frighteningly high deficit.

What we do know is that the property market really lead us into the recession and although it can’t lead us out, it does seemed to have ‘stabilised’ at a level that the industry and consumers can cope with. Demand and supply are likely to stay fairly level as there is little likely to change from 2009. Lenders aren’t being more generous with their mortgage rates and deposit levels and while funding remains tight, so will the market be restricted to current levels.

It’s likely that by April/May/June time the media will report a ‘slowing’ of price gains as they compare 2010 to a better performing 2009, so buyers won’t be in any rush to purchase. Demand should continue though as people realise renting is (currently) quite a short term option and as rents rise, those who are ‘thinking of buying’ are likely to come across properties they really want to live in and can afford.

As the realisation hits that sellers just won’t sell at lower prices, and the market doesn’t dip further, demand may grow slightly along with supply as people simply have to move.

2010 is likely to report ‘property price waves’ with prices increasing, then showing a decrease, but year on year prices are likely to end up slightly higher, such as a few percent than current. This will be helped by a rise in prices for new builds who are in a great position to manage their supply versus demand this year.

Rents however will take a big increase of 5-10% depending on stock levels in areas and if interest rates start to move, repossessions will increase but are likely to be snapped up by property investors.

Self builders will continue to have a great year, but by 2011 are likely to start to struggle to find plots and tradesmen again, as developers start to increase their activity and come back into the market place.

We’ll revisit my forecasts on a month by month basis and especially when we know who is going to get into government, as this will influence what happens over the next few years and depends on how supportive – or not – the future government will be.

What do you think will happen and why this year? Let us know YOUR predictions!

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