Housing analysts are increasingly predicting the likelihood of a W-shaped cycle where the recent house price bounce tails off and falls back in 2010 before recovering again in 2012.

Jones Lang Lasalle, the property adviser, says the market stabilisation looked unsustainable and forecast that prices would drop about 7% next year.

James Thomas, head of Jones Lang LaSalle’s residential team, said that the rally would soon weaken with a sustained housing market recovery likely to be deferred until 2012.

Financial Times