Savills: House prices to fall by 7% in 2010

House prices could fall by nearly 7% in 2010, according to a Savills forecast.

The property group predicts that house prices will go into reverse next year after a 3.7% rise in values in 2009.

It predicts a 6.6% decrease next year, followed by the beginning of a recovery with prices rising 2.7% in 2011, 5.5% in 2012 and 8% in 2013.

"We have probably not seen the last of house price falls in the mainstream markets yet," said Savills' head of residential research, Yolande Barnes.

"The timing may be uncertain but there will almost certainly be peaks and troughs during the next five years.

"This may sound like doom-mongering but, if we are looking at more volatile markets moving forward, these risks argue for less short-term speculation in housing and more medium and long-term holding of high-quality stock."

Demand outstripped supply in October, according to the National Association of Estate Agents, with five buyers chasing every home. But the number of transactions was down in October, as estate agents sold an average of 7.7 properties, compared with September's figure of 8.5.