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LONDON: UK house prices will decline next year as rising unemployment and concern about the government's fiscal squeeze limit demand, Hometrack said.
Property values will drop 1% after stagnating in 2009, the London-based research group said in a statement on Dec 28. Prices increased 0.1% in December from the previous month to an average £156,900 (RM 859,065).
The economic slump has put more than 600,000 people out of work, and the number may rise as the UK recovers from its longest recession on record. Prime Minister Gordon Brown and the Conservative opposition are working on ways to curb a record deficit after the election, which is due by June.
"While economic growth is expected to pick up in 2010, rising unemployment and slow growth in household incomes is set to act as a drag on demand," Richard Donnell, director of research at Hometrack, said in the statement. "The next year will also see a growing focus on the election and further speculation over possible changes to fiscal policies and government spending. It is unlikely that the improved market conditions of 2009 will be replicated."
A shortage of homes available for sale will support prices, Hometrack said. The volume of sales will rise to about 780,000 in 2010 from 700,000 in 2009.
This month, four of 10 regions tracked by Hometrack showed an increase in prices, while the rest showed no change. "The improvement was led by London and the South East, where prices gained 0.2%. Prices across England and Wales are down 1.9% from a year earlier. -- Bloomberg
Property values will drop 1% after stagnating in 2009, the London-based research group said in a statement on Dec 28. Prices increased 0.1% in December from the previous month to an average £156,900 (RM 859,065).
The economic slump has put more than 600,000 people out of work, and the number may rise as the UK recovers from its longest recession on record. Prime Minister Gordon Brown and the Conservative opposition are working on ways to curb a record deficit after the election, which is due by June.
"While economic growth is expected to pick up in 2010, rising unemployment and slow growth in household incomes is set to act as a drag on demand," Richard Donnell, director of research at Hometrack, said in the statement. "The next year will also see a growing focus on the election and further speculation over possible changes to fiscal policies and government spending. It is unlikely that the improved market conditions of 2009 will be replicated."
A shortage of homes available for sale will support prices, Hometrack said. The volume of sales will rise to about 780,000 in 2010 from 700,000 in 2009.
This month, four of 10 regions tracked by Hometrack showed an increase in prices, while the rest showed no change. "The improvement was led by London and the South East, where prices gained 0.2%. Prices across England and Wales are down 1.9% from a year earlier. -- Bloomberg
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