A survey from property company Knight Frank revealed 63% of those polled feared the effects of unemployment on the property markets and most also felt credit conditions would only loosen marginally over the next year.
On base rates, those surveyed see base rates staying low at between 0.5 and 2%, with few thinking rates will rise beyond 2%.
Meanwhile on price growth, 38.7% of property experts think house prices in the UK will rise by between 0 and 5% over the next 12 months and 24.2% felt that there would be no change in house prices during this period
Liam Bailey, head of residential research at Knight Frank, said: “The obvious headline from the budget was the seriousness of intent of the government to deal with government debt. This implies a huge requirement on the private sector to fill the gap left by the state.
“This implies a steady growth in bank lending to consumers, businesses and the property sector, as we have seen, in the short term this is unlikely, and this will undermine pricing in asset markets – including housing.
He said London prices – supported by foreign money and less reliance on the public sector – will escape significant price falls.
He added: “Two key things to watch will be the widening differential between the South East and London and the regions in terms of housing market performance. The other will be the reaction of the mortgage providers and the government if house prices do begin to fall in earnest again.
He said he expected house prices in the UK to fall 3% in 2010, implying a decline of 6% in the second half of the year. In London we believe that prices will rise by 7.5% this year, setting the scene for price falls in H2 after the strong growth seen earlier in the year.
