House prices

Here’s my hot prediction for 2009: house price inflation at 10 per cent. Yes, that is a 10 per cent increase, and yes, I do mean 2009. Halifax figures for the year to November were still showing prices down by 1.6 per cent — but believe me, by the end of this month housing will be showing double-digit growth.

To be honest, this is not really a prediction: the 10 per cent increase in property prices across the country is already in the bag. While the statisticians at Halifax and Nationwide have been reporting annual falls in the market, their raw data shows a full-blown boom. The last year when prices rose by 10 per cent or more was 2004 and they collapsed by nearly 19 per cent in 2008, according to Halifax. The reason annualised rates can still be negative now is that the market turned in the spring and the price plunge in the early part of the past year still more than offsets a remarkable recent recovery.