LONDON (ShareCast) - An increase in the number of homes for sale could cause house prices to fall 6.6% next year, warns upmarket estate agent Savills (LSE: SVS.L - news)
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Prices have been on the rise for the past few months and are now 7.1% higher than where they were at their low point six months ago, the Halifax revealed earlier this week.
The market has been driven by a property shortage, but increasingly positive economic data is giving potential sellers the confidence to put their homes on the market.
Savills thinks prices will rise 3.7% this year, but believes the market will be characterized by a series of peaks and troughs over the next five years.
It says there's a 50:50 chance of the fall in 2010, with the North expected to be hardest hit, but prices are seen rising 2.7% in 2011, 5.5% in 2012, and 8% in 2013.
Then between 2012 and 2015 they could leap as much as 27%, taking the cost of an average home to £197,917, more than 7% above the peak reached in the middle of 2007.
"We have probably not seen the last of house price falls in the mainstream markets yet," said Savills' head of residential research, Yolande Barnes.
"The timing may be uncertain but there will almost certainly be peaks and troughs during the next five years. This may sound like doom-mongering but, if we are looking at more volatile markets moving forward, these risks argue for less short-term speculation in housing and more medium and long-term holding of high-quality stock."
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