UK House Prices Rose 5.9% in 2009 but 2010 is Clouded in Fog...

Well, Nationwide have released their figures for UK house prices in December and there is nothing very surprising at all. The rate of monthly growth slowed massively with a growth of just 0.1% between November and December. This brought the annual growth to 5.9% for 2009.

The accompanying report says that 2010 is clouded in fog. Raising the same points I have over just how many people there are left that have the deposit to get a decent mortgage. Whoever wrote the report should have been a politician; the last labour market report I read was slightly more positive than the last, just as it was slightly more positive than the one before that, but it still showed the unemployment rate rising. Nationwide however, have chosen to highlight the decline in claims for Jobseekers allowance.

Correctly, the report concedes that there will be significant public sector job losses in 2010, and there may not have been sufficient recovery in order that they can all be reemployed in the private sector, which is bound to apply renewed downward pressure to house prices.

But for some sort of miracle -- like the finance-fairy leaving 200 billion under Mervyn King's (Bank of England governor) pillow for 100% mortgages -- I am sticking to the forecast I made in a recent article: the price rise seen this year, 5.9% according to Nationwide, and about 8.5% according to Halifax, will be knocked back of next year, and then prices will flatten until at least the 4th quarter of 2011.

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