Housing market predicted to bounce back in 2010

The credit crunch will soon be over and the housing market will begin to recover, according to an authoritative report from the real estate provider, Savills.

Savills, who successfully predicted the end of the 1990s property crash, and the sharp rise in the market that followed, have said that London, the south-east and Scotland will be the first to recover. East Anglia and the Midlands will then emerge from the downturn, while prices in the north-east and Northern Ireland will recover in 2016.

The Savills report comes a day after the Halifax revealed a record drop in house prices. While the report predicted a 15% fall in prices in 2009, it said the housing market would experience a 20% rise the next year.

By 2020, average house prices could be moving towards £500,000.

According to the Savills report, house prices will recover quickly thanks to easier mortgage lending, a softer approach to repossessions and a supply shortage. It said: “For those brave enough to anticipate the upturn, the rewards will be substantial.”
 
Not everyone agrees with the prediction of a swift recovery however. Martin Ellis, chief economist at the Halifax, said: “It’s difficult to call the bottom. The consensus view is that prices will fall 20% over 2008 and 2009, which will bring values back to the long-term average.”

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