Savills warns of further drop in house prices

Recent signs of recovery in the UK housing market have not convinced Savills that house price falls are over.

The up-market estate agent is predicting that prices could fall by 6.6% in 2010, wiping out this year’s estimated gain of 3.7%.

Currently estate agents are reporting a shortage of properties on the market but Savills expects the number of homes for sale to outstrip demand in the coming year.

However, price rises are expected thereafter as follows: 2.7% in 2011; 5.5% in 2012 and 8% in 2013, according to Savills.

The firm’s head of residential research, Yolande Barnes, believes peaks and troughs as inevitable during the next five years, as the market passes through a volatile period.

In other UK property news, the National Association of Estate Agents (NAEA) has reported that would-be home buyers were out in force in October, while stocks remained low.

The average estate agency branch had 57 properties on its books last month, down from 62 in September.

Surprisingly, sales fell during October to an average 7.7 properties per branch, down from 8.5 in September.

NAEA president, Gary Smith, is therefore urging the Government to extend the stamp duty holiday for properties worth up to £175,000, which is due to end in December.

He believes that failure to do this could “precipitate an unwelcome pause in the housing market at the start of the New Year”.

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