According to Galliford Try Homes, house-builders will take the opportunity to invest in historically low-priced land to build a more main stream affordable product for 2010.

Industry housing starts will plateau at around 90,000 in 2010 and completions will rise by up to +15% on 2009 levels to around 80,000, however, output will still be well below the now redundant 240,000 new home Government targets. While consumer confidence is set to improve further into 2010 and demand for new homes continues to rise, transactions will be dependant on having affordable lending in place to complete purchases.

Ian Baker, group managing director for house-building at Galliford Try Homes, said: “From the start of the year we will see banks reassessing the risks associated with mortgage lending as interest rates remain at historical lows and loan-to-values (LTVs) show signs of improving. Lending at more reasonable costs will give the consumer renewed access to funds at the same time as the supply of new homes slowly increases. This will ensure a sustained, affordable market, not a return to soaring prices.”