Housing: The outlook

FOLLOWING the property crash, when between July 2007 and January 2009, an estimated 20 per cent was wiped off house prices, homeowners and prospective sellers have been left wondering one thing: when will things get better?

Since then there have been many glimmers of hope for them, and a few false dawns, which have made predicting the market's direction tricky: price rises brought on by the shortage of properties on the market (itself brought on account of low prices) have brought about a boost to house prices.

But often such rises prove to be short-lived, snuffed out by a small surge in prospective sellers looking to take advantage of them, forcing prices back down.

At the beginning of the year, the Centre for Economics and Business Research said prices would rise by more than 6 per cent during 2010, and will be around 20 per cent higher than today's levels by the end of 2013.

However, national figures have shown that house prices have either fallen or remained static in every month since the end of May, which has almost wiped out rises earlier this year and prompted fears among prospective sellers of more falls.

So where do the banks and property experts stand on the likelihood of a return to a rising market?

In the short term, the most up-to-date report, published this week, believes prices in Scotland will remain depressed for at least another year. Nationwide Building Society reported a 0.7 per cent reduction during October.

The Edinburgh Solicitors' Property Centre has said it is not expecting a significant rise for 2011, advising buyers to adopt a "wait and see" attitude.

In the longer term, according to PricewaterhouseCoopers it could be the middle of the decade before things truly recover. It has said there is a 70 per cent chance that the real cost of a property in 2015 would be below that seen in 2007 and a 50 per cent chance that it would take until 2020 for the market to surpass its previous peak.