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House price forecasts for 2010 - The Financial Times

Severe limitations in the supply of property will continue in 2010 as the housebuilding industry struggles to increase output to any meaningful level, which will underpin prices in the face of very substantial demand. Mounting Government pressure on lenders to reduce margins and increase lending, combined with growing lender competition now the major annual house price indices are turning positive, will be the catalysts for maintaining affordability for new buyers and further reducing the costs of new borrowing. Base rates will eventually start to rise, possibly at the end of 2010, but payable mortgage rates will remain low for the next two years at the very least. Repossessions will be modest again in 2010 as they were in 2009 at c 50,000. Unemployment probably peaked around the end of 2009 and will have little effect on prices. Tax increases will also hold back sentiment and affordability to some extent.