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House prices to remain depressed in 2009

House prices look set to fall further in 2009, resulting in an overall price decline of at least 25%, says the housing market forecast published at the end of last year by the Royal Institute of Chartered Surveyors.

The on-going caution of lenders and the worsening economic climate is likely to result in a decline in house prices of around 10% over the next 12 months. However, recent RICS housing market surveys indicate transaction activity may have reached the bottom and there could be an increase in sales of more than 10% during 2009.

New buyer enquiries have climbed to their best level since October 2006. However RICS is warning that without changes in the mortgage market, these enquiries will not convert into new sales.

House building is also set to continue shrinking throughout 2009. New housing starts for 2008 are unlikely to be much above 110,000, a figure far lower than recorded during the recession of the 1990s.

Richard Sayer, RICS North East housing market spokesperson, said: “What is not immediately evident is that the expected 25% decline is the national figure and therefore certainly not the case for the North East market. The figure for the North East region is more likely to be closer to 15%.

“Although we have seen an unprecedented slowdown in the housing market there are some encouraging signs with new buyer enquires and viewings improving. If access to mortgages funds becomes easier I anticipate that sales will increase from the all time low of 2008.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .