Predicting a market hugely dependent on how much lending will be made available, the Association said:
- House prices could remain flat, or, in some markets possibly drop slightly, for the first six months, before picking up again and remaining stable in the second half of the year
- Supply will remain stable in the run up to the General Election, after which there are likely to be more houses available for sale, particularly if Home Information Packs are scrapped
- The General Election would cause a lull in activity as people adopt a "wait and see" approach
- A number of buyers will continue to take advantage of lower interest rates and lower priced property.
- The continued presence of First Time Buyers will be critical to market success.
"The beginning of 2010 sees several things happen. The stamp duty holiday will end, despite warnings from much of the property industry that this is a mistake, and this has the potential to reverberate around the market.
"We also have an increase in VAT and an imminent General Election. This means that some people will adopt a wait and see attitude to housing as they study what tax changes will mean for them and how the election is likely to play out.
"In recent months the market has witnessed a slight increase in housing prices, driven largely by the fact that, in some markets, demand is outstripping supply. If more property comes onto the market the house price rise will flatten or, in some cases might fall slightly over the first six months of the year.
"During the year we have however seen a pick up in demand as many take advantage of lower prices and interest rates. This clearly indicates that the British public still believes that investing in bricks and mortar is the right thing to do.
"There have been encouraging levels of first time buyers throughout 2009 and I would hope this continues into 2010. Again, the situation with lending will have an impact. The NAEA believes that responsible lending to responsible people is crucial to any recovery."
