Savills predict falls in house prices next year

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by Kay Murchie

Property group Savills is predicting ups and downs within the housing market over the next five years.

According to the group, after a 3.7% rise in values this year, the market will see peaks and troughs.

Next year will see a drop of around 6-7%, while values will rise by just 2.7% in 2011, 5.5% in 2012, and 8% in 2013, according to the group’s forecast.

The report comes just a few days after the Halifax said house prices rose 1.2% in October which is the fourth consecutive month that prices have gained.

Meanwhile, the Nationwide said house prices were up by 0.4% in October and 2% higher than in October last year - the first annual rise since March 2008.

However, the Halifax did caution that the current momentum is unlikely to continue, since more homes are being put up for sale and this will, in turn, result in a slowdown in the demand for homes.

Many housing experts such as Ernst & Young ITEM Club, Jones Lang La Salle and Capital Economics have all warned of a potential double dip.

Meanwhile, according to the National Association of Estate Agents (NAEA), demand is greater than supply with an average of five buyers chasing every property at present.

However, the NAEA said despite the high demand, estate agents sold an average of 7.7 properties each in October - down from 8.5 in September.