Jones Lang LaSalle predict further falls in house prices
According to Jones Lang LaSalle, house prices in the UK could fall a further 12-14% during the remainder of the year and a further 1-3% next year.
The outlook is even worse for central London with the organisation predicting falls of up to 18% by the end of 2009.
James Thomas, Head of Jones Lang LaSalle’s Residential Investment team, commented: “It is important to remember that the recent green shoots of recovery are still very green.
The UK economy is still in dire straits and it is unlikely that the full impact of declining unemployment has yet to hit the housing market. It is also plausible that the current fillip is only temporary and due to the sharp fall in interest rates, improved affordability and activity from overseas investors taking advantage of the weakness of sterling“, adds Mr Thomas.
The reason behind the further falls in house prices is due to higher unemployment and the implications this has for repossessions and household finances.
Furthermore, the number of properties on the market is likely to rise during the year as people struggle to sell their homes.
The market will see a strain on prices, activity and confidence as the impact of negative equity for many homeowners will be an additional burden for the market since it will limit the amount of people who are able to move.
Despite the bleak forecast for London, the company believes that the capital will lead the way in the recovery of the housing market, experiencing positive house price growth in the autumn of 2010.
London will also see the strongest house price recovery during 2011-2012, primarily due to the capital hosting the Olympic Games. However, the Midlands and the North are expected to see a slower recovery.
On a positive note, once house prices have bottomed out, first-time buyer demand will surge, concluded Jones Lang LaSalle.