House prices could drop in 2010, mortgage holders warned

20 October 2009

Written by Gavin Elley

Mortgage holders have been cautioned that the current scale of price rises is "unsustainable" and may not continue into the new year by the head of residential research at Knight Frank.

Liam Bailey asserted that people are currently taking advantage of low interest rates, which has made mortgage borrowing more affordable.

Property prices are increasing thanks to reduced supply of available homes and greater confidence in the economy during the last year has also contributed to this rise, he noted, although he added that it is likely to be short-lived.

"It is more than likely that by the end of the year you will begin to see the end of these price rises," he said.

However, Mr Bailey added "we should be relatively safe from massive price falls" as interest and inflation rates are not likely to rise significantly.

According to the Rightmove house price index, which was published on October 19th, the average asking price for a property is currently £230,184 - an increase of 2.8 per cent from last month's figure.

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