Property prices are set to rise in 2010 but sellers may have to wait until the end of the year to benefit, according to the latest predictions.

With the New Year looming, industry bodies are already making their forecasts on the housing market, with the Building Societies Association (BSA) expecting a three per cent rise in prices during 2010.

Meanwhile the National Association of Estate Agents (NAEA) said it expected a quiet start to the year as potential buyers digested tax changes occurring in 2010 before the market picked up in the final six months and then stabilised.

Peter Bolton King, chief executive of the NAEA, said: "The beginning of 2010 sees several things happen. The stamp duty holiday will end, despite warnings from much of the property industry this is a mistake, and this has the potential to reverberate around the market.

"We also have an increase in VAT and an imminent General Election. This means that some people will adopt a 'wait and see' attitude to housing as they study what tax changes will mean for them."

The BSA based its three per cent rise prediction on data taken earlier this year, and in December 2008, which suggest confidence is now slowly returning.

Its December forecast compares to a 1.6 per cent rise in prices in September and an 8.6 per cent decrease predicted in December last year.

However, it warned with unemployment still on the rise a lack of job security could prevent many people from buying a property. In a survey, 60 per cent of respondents cited unemployment as a barrier, and 65 per cent said finding a deposit posed an overwhelming hurdle.

Paul Broadhead, head of mortgage policy at the BSA, said: "The recent stabilisation of house prices of the latter part of the year is clearly reducing pessimism in the housing market.

"However, a healthy housing market is heavily dependent on stability in the labour market, and with unemployment likely to rise further in 2010 price growth will be moderate at best in 2010."

SOURCE: MyFinances.co.uk