UK Property Market Recovery: 5-7% Price Growth in 2010

Jones Lang Le Salle has forecast that the UK property market recovery won't begin until 2011, the same year as it predicts recovery for Dubai. I believe the UK property market recovery will be earlier, and here's why:

The government is going to great lengths to increase the availability of mortgages, and the percentage of mortgages also, while buyer activity in the market continues to increase steadily.

These buyers are coming out and actively looking for property, this isn't translating into sales because of a fall in housing stocks, and because property prices haven't quite dropped enough for them to buy -- none the less there is pent up demand awaiting the market's bottom.

Over the next 6 months, more and more forced landlords will become so fed up of the responsibility and potentially the outlay of being a landlord -- responsibility they never wanted - and decide to either cut their losses or be more realistic about their gains, whatever the case may be.

Housing stocks rose in the first two weeks of January (NAEA), but fell back again as vendors were unwilling to drop their prices as far as was necessary (NAEA). But as more time passes selling is likely to become more necessary, especially for people who need to move into a bigger house for their growing family, or move for better employment opportunities. Again, this is likely to happen in the next 6-8 months.

As housing stocks grow, sold by vendors willing to be more flexible over their sale price, the gap between what buyers feel they should be paying, and what sellers are willing to sell for will slowly but surely converge.

I therefore predict a solid bottoming of the UK property market in late 2009, at which point sales will increase rapidly. This increase in sales will eventually lead to a growth in prices, and I predict at least a 5-7% price growth in 2010.