Mainstream UK house prices will fall by 0-3% in 2010 with stronger performance in London and the South. 2011 will be a year of consolidation for the UK housing market. We expect the housing market to rally strongly from 2012 with annual price growth heading towards 10% pa if not above. London will lead both the economic and housing market resurgence.
We believe that the medium-term outlook for the UK housing market is very positive. Demand, activity and prices should all be buoyant during 2012-2014, encouraging increasing participation by housebuilders, developers, lenders and investors.