Housing market
recovery for the mainstream market. Cautious
mortgage lenders currently favour existing
owners with high levels of equity and these are
more common in the south than the north.
Regional variations
Savills therefore predicts that southern England
(and Scotland, where price falls have been more
modest than in the rest of the UK) will see prices
starting to increase from 2010.
A large proportion of the Midlands, Wales
and Yorkshire may have to wait until 2011 and
north east and north west England will see
prices gradually increase from 2012. Even within
any one region, there may be sub-sectors with
varying rates of recovery.
For example, prices in city centres with large
numbers of unsold new homes are likely to
move upwards more slowly than in more
popular suburbs. Likewise, prime locations
where most buyers will not have to obtain
mortgages will recover faster than those where
the majority of transactions depend on
purchasers borrowing. The recovery, therefore,
will be more layered and less uniform than we
might expect.
One sure sign of the unpredictable nature of
the market can be seen by the current fortunes
of second homes. The casual observer may be
expecting these properties to be falling in
number and collapsing in value in the current
malaise – yet Savills Research suggests the
reality is a little different. n
Areas with excellent schools,
like Royal Tunbridge Wells, are
Four stages of recovery
most likely to show early signs
of recovery in the market
Savills believes the market is now in the first of four stages of recovery
“We’re beginning to experience the first signs of change,” says Yolande Barnes, of Savills Research. “The
rate of price falls is slowing, especially in prime markets. Occasionally, building society monthly figures in the
mainstream ‘mortgage’ market have been positive.”
This is not to say recovery will be swift but it is at least on its way.
Stage 1 – Seeds planted Stage 3 – New shoots
n What’s happening? Low supply, low n What’s happening? Mortgage market
demand, restricted mortgage lending eases and wider economy improves
n Who’s active? Overseas buyers, funds n Who’s active? Buyers moving up and
and those with private wealth requiring mortgages
n Good investment? Prime central n Good investment? Mainstream family
London, south east commuter towns housing
Stage 2 – Watering Stage 4 – Blooming
n What’s happening? The mood lightens n What’s happening? The most depressed
as further price falls appear unlikely factors begin to recover
n Who’s active? Cash-rich owner occupiers n Who’s active? First time buyers
n Good investment? Prime markets in the n Good investment? New developments
regions and buy-to-let purchases
savills ultimate property collection 9
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