The volume of property transactions across England and Wales could rise by up to 15% on 2008 levels. Britain has a culture of home ownership and with transaction levels currently down 52% compared to last year, the demand for housing, coupled with low interest rates, will aid recovery. Up to 50% of house transactions occur because of death, divorce or debt and this will continue irrespective of the credit crunch.
As prices stabilize, consumer confidence will again return, offering an extra boost to the market as buyers look to take advantage of the current low house prices and favourable mortgage interest rates. Prices are likely to remain static in many areas of the country over the course of 2009, with only some locations experiencing a further slight fall of up to 5% where the market has not yet fully re-adjusted. As the rate at which house prices are falling markedly slows, it will cease to be headline news, and buyers will be less likely to chance their arm by demanding a last minute price reduction just before exchange of contracts.
Areas which traditionally have seen the greatest volatility in house price rises and more recently falls, are likely to be the first areas to show signs of increased transaction volumes next year, followed by modest increases in prices after 2009.