Market Analysis Spring 2011 Welcome
commuting reach for work. Our newly created country house department, which caters for this sector of demand, is proving to be an asset to our customers and is experiencing brisk activity.
First time buyers are, unfortunately, still struggling to get a foothold on the property ladder as high levels of deposits continue to penalise them. Until there are signs of sustained economic recovery, the banks are likely to continue to squeeze this end of the market.
Welcome to our latest review of the UK property market where from a monthly survey of franchisees we share the collective feedback from our offices.
The period under review, from December of last year until this February, saw a harsh winter slowing transactions at the close of the year but a sharp rebound in interest during the first weeks of 2011. Demand remains pent-up, but while caution bred by economic austerity and an ongoing lack of mortgage availability overhang the market, the number of sales completed will continue to underperform the long term average.
Where finance availability is a secondary concern, the markets remain active. A steady increase
in interest rates is likely to be absorbed by the prime markets, which continue to hold up very well and to outperform the broader UK market. There remains ongoing upwards pressure on prices and we have noted a higher percentage of asking prices being achieved this year in central London than in the first quarter of 2010. The increase in stamp duty in the budget has been long heralded and is not a sufficient disincentive to slow progress in this sector of the market.
The family house market continues to drive activity as a proportionally larger part of a smaller market. As ever, there is movement out of London as couples with growing families look for more space and open countryside, so long as the capital remains within easy
As a result of this, the rental market remains buoyant and, with the number of properties available in 2010 down some 20% on 2009, rents continue to rise. The classic two bedroom flat remains an opportunity for landlords as young professionals turn to rental accommodation. With growing yields, these present an opportunity for those with sufficient equity to invest.
We therefore expect to see mixed conditions over the traditionally active spring period. We hope that the Chancellor is right in thinking that the budget will restore both enterprise and growth in the UK and that the property market can again move ahead with confidence.
Dominic Agace CEO M Winkworth PLC
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