Savills Research | The Residential Property Focus May 2009
Unless there is a further
figure has risen to nearer 35% in the last of the prime markets have been more
six months. As might be expected, debt- active than the upper tiers, re-imposing
significant shock to the related sales have risen, particularly in thresholds in the market. Agents are
global financial system,
the £500,000 to £2million markets where reporting a ceiling of £1.5-£2million above
buyers have overstretched themselves in which buyers are more reluctant to trade.
evidence continues to
their attempts to work their way up the While indices are yet to show price
prime housing ladder. While the number of stability, we believe the increase in activity
suggest that London will
such sales has doubled, the overall effect suggests the prime markets are within 5%
lead the recovery.
is limited given that prior to the economic and 10% of their bottom. Rates of fall have
crisis they only accounted for between 2% slowed, and though we expect two or three
and 2.5% of the total market. more quarters of marginal falls we continue
Established prime locations Those buyers who have sufficient to forecast that falls from peak will not
In prime markets such as those in south equity to make the move are looking to exceed -30% in prime central London and
west London, regional cities and the get the best value out of that equity, -25% in prime regional markets.
country, which are more traditionally avoiding fringe locations but concentrating Unless there is further significant shock
associated with full time, owner-occupier their efforts on established prime locations to the global financial system, evidence
demand there has also been a noticeable offering more property per pound. As a continues to suggest that prime central
increase in demand and activity. result, ‘good value areas’ such as Islington, London will lead the recovery, returning to
In particular, those who sold at or near Wandsworth and Clapham Old Town have modest levels of positive annual growth as
the top of the market and have spent the seen a noticeable increase in activity. early as the end of next year. n
downturn in rented property, are beginning Outside of London, price falls have
to attempt re-entry to the market, but been consistent across the country with Lucian Cook is a Director of Savills. He
are already finding themselves chasing a very small regional variations. Evidence joined the research team at the beginning
lack of prime stock. Prime markets have of new buyer registrations and viewings of 2007. Lucian is a qualified chartered
become much more dependent on the suggests that demand is flowing out of surveyor with over 13 years of professional
need-based sellers. London in a ripple effect, most noticeably in experience. He has now established
This is reflected in the fact that while the Home Counties and the South East. himself as a leading commentator on
death, debt and divorce sales typically The lack of bonus money has residential property issues in the press.
account for 15% of all transactions, this contributed to the fact that the lower tiers
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