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Prices to remain flat in 2010, forecasts Lloyds

Lloyds Banking Group economist Martin Ellis has forecast a flat price line for 2010 after revealing a 0.1% decline in the average national house price in April.

The latest house price index from Halifax, which is owned by Lloyds Banking Group, reveals that the average national house price slipped by 0.1% to £168,202 last month, which is down from the 1% increase in March. However, prices increased by 6.6% on an annual basis.

Ellis says: "The underlying rate of house price growth has slowed in recent months following the relatively sharp rebound, albeit from a low base, in the second half of 2009.

"The improvement in house prices since spring 2009 has encouraged more people to try to sell their property. New sales instructions have risen, helping to push up the stock of unsold properties in recent months. As a result, the imbalance between supply and demand is easing somewhat.

"Our view is that house prices will be flat during 2010 as a whole."

The forecast follows the news that Savills has seen a market slowdown.

However, in a statement out on Wednesday, the property group claimed that this is amid a stronger than anticipated Q1 performance.

It states: "The pattern of trading that we reported at our full year results in March has continued. The first four months of the year have seen good trading performances from both our UK Residential and Asia Pacific businesses, and continued improvement in the UK Commercial market.

"The Continental European business has traded in line with our expectations of gradual improvement. Other business sectors are also performing broadly in line with our expectations."

Savills revealed that pre-tax profit declined 24% to £25.2m last year, despite residential revenue having increased 11%, as part of its full-year results announcement for 2009 out in March.

The group's underlying pre-tax profit decreased from £33.2m to £25.2m during the 12 months to December 31 2009, while residential transaction business increased revenue to £71.3m, which it attributed to the strong performance from the London and Home Counties market.

Savills' statement was issued ahead of its Annual General Meeting, which was scheduled to take place in London on Wednesday afternoon.

It adds: "We are pleased with the overall performance of the group and continue to pursue our strategy of growing the business profitability, both organically and through selected investment opportunities as they arise."


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