Shortfall in housing supply will push up prices despite wider economic pressures

House prices are set to rise in 2010 but only by 1-2%, according to RICS.

Economic uncertainty and cautious lending will peg back price rises despite a continued shortfall in housing supply.

The RICS UK Housing Market Forecast predicted that housing supply would increase through the year but would still not keep pace with buyer demand.

Transactions were likely to rise to a monthly average of 70,000 during 2010 from the current 60,000.

RICS warned that rising interest rates and the end of fiscal stimulus programmes would impact on house prices in 2010.

Simon Rubinsohn, RICS chief economist, said: “The combination of more available property and the beginning of the exit strategy from the big stimulus programmes that have helped support the economy will gradually exert a greater influence.”

“Transactions levels are likely to increase, fulfilling the Christmas wish list of many agents throughout the country but first time buyers are likely to continue to struggle to procure finance from lenders without the help of generous relatives."

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