Rightmove expects December’s 2.2 per cent drop in prices to be followed by another drop in January as new sellers keep dropping prices during the traditionally weak winter quarter.
In the early spring, it is expecting that asking prices will gain again, continuing the heightened level of activity seen during 2009. However, the post-election uncertainty is forecast to reverse these early gains.
Miles Shipside, commercial director at Rightmove, said: “Time may well be of the essence as the election is likely to be a party pooper. This year turned out to be a good time to trade up, and we forecast the positive mood will continue into 2010 until the post-election hangover kicks in.”
The recession is also forecast to have had a long-term structural impact on the UK housing market whereby there will potentially be a fall in owner-occupation, with fewer first-time buyers, more time between trading up, and greater reliance on the rented sector.
In this environment, location will be the most important factor in insulating asking prices against these structural shifts and Rightmove expects desirable areas in the south to fare best. Landlords should also benefit with an end to over-supply.