House price dip forecast for 2010

Knight Frank yesterday forecast that prices would end this year 2 per cent higher than at the start, with the recovery being led from the South. The agent said, however, that the mainstream UK residential market was likely to see a modest price fall of about 3 per cent in 2010, before a limited rise in 2011 followed by more significant gains in 2012. ‘Continuing growth in unemployment, allied to wage freezes and tax rises, and a rise in average mortgage rates will force a number of sales which, in the absence of greater depth of demand, will see prices slipping back,’ said Liam Bailey, head of residential research.