Outlook on UK House Prices Depends on Who You Listen To

There are many conflicting reports on the future of UK house prices at the moment.

This week Halifax issued their August figures showing a 1% monthly rise, and Knight Frank put the UK property market in position 13 in its quarterly league table, with prices having risen 1.1% in the second quarter. According to Knight Frank global house prices (including the UK) have started to stabilise, and there are to be very few price falls from here on out.

Yet in the same week estate agency Jones Lang La Salle inc issued a research report on how UK house prices are likely to fall 7% next year, as rising unemployment, combines with curbed lending and a struggling economy to reverse the "unsustainable and unjustified" gains of this year.

What's the truth here? Well, I'm afraid I am with Jones Lang La Salle.

I have said it before and I'll say it again: without normalised lending we can't have the kind of transaction volumes that we need to help house prices find a true and solid bottom, and without a better employment outlook it is unlikely there will be sufficient numbers of people even looking for mortgages to do so.

As my regular readers will know: I believe the market will bottom in mid-2011 when the international economic recovery is well under way allowing the banks to de-restrict lending somewhat.

The difference perhaps between the vastly varied outlooks is that Knight Frank is a UK based estate agency, and La Salle is a US based agency.