Hometrack market report predicts lower incomes and rising unemployment will keep demand and prices low

The latest figures released by housing information firm Hometrack indicate that house prices will fall by 1% in 2010.

The December survey shows house prices ended the year 1.9% down on a year before, with a fall of 2.2% in new buyers registering with agents since January 2009.

Housing supply continues to be an issue, as demand across the country increased 41%, peaking at 70% in London. However, housing volume increased nationally by just 7%.

Richard Donnell, director of research at Hometrack, said: 鈥淲hile a scarcity of housing for sale is set to remain an important feature of the market in 2010 it is the prospects for demand that will dictate the outlook for prices in the next 12 months.

鈥淩ich households could continue to put upward pressure on prices in localised markets in 2010. Yet a sustainable and broad based recover in the housing market needs a broader base of buyers. While economic growth is expected to pick up in 2010, rising unemployment and slow growth in household incomes is set to act as a drag on demand.鈥�

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