The falling property prices were certainly front of most people’s mind in 2009. So as we move into 2010 the price of real estate will no doubt be on the radar of many Brits to see if predictions of a recovery will hold true.

Well, the good news comes in one of the first Housing Index’s reports in 2010, produced by the Halifax, it would seem that 2009 was not all bad. The report suggested that property prices across the UK actually increased by 1% in December 2009. In addition, it suggested that prices have improved around 9% since the low in April 2009 bringing the average price of a house to £169,000 in December 2009. No doubt that the falling interest rate and slowly improving economic situation had a lot to do with this positive news.

So with property prices fairing significantly better than some had predicted, what will be in store for us as we move into 2010? Interestingly, analysts predict a mixed bag ranging from a 5% fall in prices to a 5% gain.

However, what is encouraging is that some have predicted a scarcity of commercial property, particularly in the City of London, is likely to bump up prices. This could bring about much needed relief to investors in the Commercial Property space who have been hit particularly badly over the last two years. According King Sturge’s ‘Property Predictions’ the value of commercial real estate could rise by as much as 10% in 2010, despite the possibility of financial institutions fleeing Britain in light of the 50% bonus tax. They base their predictions on an improving banking sector and overall supply shortages.