House prices to rise in 2010

HOUSE prices will continue to creep up in the New Year but end next year just one to two per cent higher than where they are now, according to new research published today.

The Royal Institution of Chartered Surveyors (RICS) predicts that the housing market will revive, with transactions rising to a monthly average of 70,000 from 55,000 to 60,000.

Supply is set to increase further in the early part of 2010 but will struggle to keep up with demand, pushing house prices higher.

The inventory of stocks on surveyors’ books remains close to historical lows.

However, the caution of lenders, the uncertain economic climate and a flat labour market mean that house prices will finish 2010 only marginally higher than they started it.

“The combination of more available property and the beginning of the exit strategy from the big stimulus programmes that have helped support the economy will gradually exert a greater influence,” said Simon Rubinsohn, RICS chief economist.

“Transactions levels are likely to increase, fulfilling the Christmas wish list of many agents throughout the country but first time buyers are likely to continue to struggle to procure finance from lenders without the help of generous relatives,” said Rubinsohn.

With more property coming onto the market it is likely that the number of completed sales will increase.