Revealed: What happened to house prices in 2010

What happened to house prices in 2010? And what's the outlook for next year?

2010 is unlikely to be remembered as a vintage year for the housing market. However, despite its troubles, it was still a year that saw a significant increase in property values in the UK.

According to property portal Zoopla, the value of property in Britain rose by £130bn during 2010, taking the average home value to £215,824, compared to £210,846 in December last year. That works out at an increase of £13.64 a day.

A year of two halves

Zoopla reckon that the old football cliché of a game of two halves equally applies to property values in Britain this year. 2010 got off to a strong start, with the average property price reaching a high of £219,106 in August.

However, since then things have certainly cooled, to the point that half of the gains made in the first half of the year have now been eroded.

So which areas have performed the best? And which have had an annus horribilis?

A good year in England

According to Zoopla’s research, it’s English properties that have enjoyed a fruitful year, with prices up by nearly 3%. That’s the equivalent of nearly £6,500. However, properties in Wales have not had such a good time, with average prices falling by well over 3%.

Scotland also had a disappointing year, with prices falling by nearly 2%.

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But that’s all a bit too vague – which specific areas have done the best and worst over 2010?

The top performers

If you owned a property in the county of Rutland up in central England, you’ve had a great year, with property prices jumping by an extraordinary 8.53% - that’s about £20,000!

Oxfordshire has also had a brilliant year, with the average property price jumping by more than £20,000 to over £300,000. Here are the top five performing areas according to the Zoopla research.

A miserable year

However, for every town that’s had a great year, there are others that have seen the value of their property fall. Great news if you’re looking to buy in that town obviously, but not so good if you already own a home there.

And it was South Lanarkshire in Scotland had the roughest year of all, with prices falling by 4.2%, the equivalent of more than £5,500. Areas of the North of England also had a forgettable time of it, with West Yorkshire and Durham both seeing property prices fall by at least 2.7%.

What to expect in 2011

So 2010 was an up and down year, but what should we expect house price wise next year?

This is the time of the year when the experts like to publish their house price predictions for the year to come, so let’s see what they’re saying.

Rightmove

Online property portal Rightmove are pretty downcast about next year. They reckon that on average property asking prices will fall 5% across 2011, having already seen sellers cut what they’re asking for in five of the last six months. The firm is basing this on its expectation that repossessions will increase substantially.

Carter Jonas

Carter Jonas, an estate agency focused on mid- to top-end properties in London and the country, expects property prices to fall by 5% as job losses intensify, followed by a 3% fall in 2012.

Centre for Economics and Business Research

One of the few outfits to show any optimism about the prospects for house prices next year is the Centre for Economics and Business Research, which has suggested average prices will rise by 2.2% in 2011, and in fact that prices will rise by 16% over the course of the next four years.

It’s based this prediction on its expectation that the Bank of England will introduce more quantitative easing which will lead to an increase in mortgage lending, by as much as 50% from current levels by 2015.

Jones Lang LaSalle

Jones Lang LaSalle, a property consultancy firm (it helps developers find funding for building new homes and advises housing associations) reckons house prices will fall by an average of 1% next year, followed by three years of healthy price rises.

Hamptons International

One of the estate agency big players, Hamptons reckons prices will fall by 4% across the UK next year. However, the firm is explicit in predicting a North/South divide, with properties in Greater London predicted to see prices rise by 3% while the South East generally will see prices freeze.

IHS Global Insight

Analysts IHS have made one of the gloomiest predictions for the housing market next year, suggesting house prices will fall by a whopping 10% from their mid-2010 levels.

The Council of Mortgage Lenders

The lender trade body has forecast that 2011 will be a pretty flat year in all respects, from gross mortgage lending levels to house prices. While it declined to put a figure on it, the CML did say it expected to see flat or modestly declining house prices over the year.

lovemoney.com readers

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