UK pricing has risen by 8% since the trough in the price cycle according to the Nationwide monthly index. With a limited supply of marketed stock, 2009 is set to see a year-on-year pricing increase of 2%.

The impetus to pricing next year is likely to diminish with economic growth forecast to be around 0.5%. More fundamentally, access to mortgage finance for the debt-dependent will adversely affect the recovery. By October, the margin for a 2-year fixed rate mortgage on a 75% LTV over the base rate was 3.83 percentage points,compared to 0.5 in the 7 years to 2007.

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