Nationwide Building Society is predicting difficult times ahead for the property market and expects that house prices will fall in 2010.

Nationwide has published it’s half year results and emphasised that market conditions remain challenging for the Building Society.

Citing surprise that property prices have rallied by around 7% in 2009, yet the UK officially remains in recession, Nationwide is predicting that house prices may fall in 2010 as rising unemployment exerts a downward influence on the market.

With over 2.5 million people now unemployed, the outlook for jobs looks gloomy as economists forecast that unemployment will exceed 3 million in 2010.

Nationwide attributes the house prices rises in 2009 to a lack of supply, rather than to an increased desire by buyers to move up the property ladder and forecasts that interest rates will remain at their current levels until at least the last quarter of 2010.

A survey by Bloomberg of 14 economists and estate agents indicates that house prices will fall by an average of 1.6% in 2010, which supports the Nationwides’ view of a decline in property values next year.
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