Assetz still confident that double dip unlikely in housing market

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by Kay Mitchell

Investment company Assetz continues to be upbeat about the housing market and believes the next twelve months are likely to bring modest further growth in house prices.

Many reports are pointing to house price falls next year but Assetz said house prices are likely to continue to increase moderately by around 5% in 2010.

Stuart Law, Chief Executive of Assetz, comments: “2009 is already well on its way to ending the year with positive annual growth of around 5%, as we forecast to much derision early this year.

“The next twelve months are likely to bring modest further growth in house prices and the UK could well end next year with an overall 5% increase. Whilst the level of house price growth will slow from the current rate of 12% per annum seen over the last six months to be more moderate, there is little evidence that the double dip, a fall to new lows, predicted by many commentators will come to fruition in 2010,” adds Mr Law.

Mr Law believes the current shortage of properties on the market is likely to worsen, as housebuilders struggle to deliver any substantial increase in new properties next year.

Assetz believes forecasts of a double-dip within the housing market are largely focused on the possibility of a new wave of forced sales, resulting from interest rate rises.

However, interest rates are unlikely to start to rise until the second half of 2010, say Assetz.

Many reports also suggest that rising unemployment will have a negative impact on the housing market but figures from the Office for National Statistics show that growth in unemployment is slowing.