The second half of 2009 has seen a rise in house prices fuelled almost entirely by a significant lack of supply. Property has been selling but in low volumes (2009 was unlikely to have seen more than circa 7-800,000 transactions - up slightly on 2008 but still some 500,000 transactions below "normal levels").

2010 is likely to start as 2009 ended with a shortage of supply which is likely to worsen as the General Election gets into full swing. People will inevitably adopt a "wait and see" approach to moving, particularly as the Tories have promised to scrap HIPs if elected and therefore sellers will see this as a cost reduction opportunity.

Talking of costs, 1st January 2010 will see the cost of buying and selling a home increase as levels of taxation are restored. Stamp Duty will apply to all property above £125000 (it currently only applies above £175000) and VAT will return to a level of 17.5% from 15% meaning all costs associated with buying and selling (agents, surveyors, lawyers etc) will increase.

Any new Government is also likely to have to increase taxation and therefore any feel good factors arising out of the Genral Election result will possibly be shortlived.

The above factors, coupled with mortgage lending at low levels and requirements for large deposits will keep first time buyer (FTB) activity at low levels. Student debt, deposit requirements and money out on rent has already seen the average age of a FTB reach 35 and it will continue to rise.

New Home starts in 2009 were at record lows and added to the lack of supply. I see this situation improving in 2010 but the real increase in transactions from this source is likely to be noticed in 2011 and beyond due to delays in the planning and construction process.

Whilst there remains a huge shortage of supply, prices are likely to rise or, at least, stay firm. There is some risk of prices falling again if interest rates rise during 2010 and if unemployment continues to grow significantly. Interestingly the current low interest rates have led to a situation where less properties have been repossessed than predicted (good news for the individuals involved but adding to the lack of supply). A rise in rates could see these numbers increase.

After the General Election and before the Government's honeymoon period is over we will see the World Cup taking place in South Africa. Strange as it may seem this is also likely to see reduced activity in the market, particularly if England do well.

On a positive note, there is significant pent up demand and we retain a huge home owning ethos in the UK. Because of the lack of supply and strict lending requirements, the rental market is likely to remain positive.

My personal view is that property will sell in 2010 and that overall we have seen the nadir in terms of price. However, the market remains fragile and I think there are a number of factors that will cause many to delay their plans and "wait and see" and therefore volumes will not vary significantly from 2009. Many people with money available will likely repay debt rather than commit to an increased indebtedness.

I feel we are likely to see a year of "bouncing along the bottom" with any real improvements in volume terms coming in 2011 and beyond.

Of course for businesses involved in the property market it is all about improving margins and increasing market share. There will be some fantastic opportunties for those with the foresight and skill to take advantage. The Legal Service Act should become law in the Autumn and could lead to some interesting possibilities for multi discipline organisations.

Finally, I would like to take this opportunity to wish everyone a happy, healthy, peaceful and prosperous New Year.