PREDICTIONS 2012
David Pollock, MD, Greene & Co.
The London property market is likely to remain stable, providing the economic climate continues in the same vein as
2011. International buyers will continue to dominate the London market moving across to areas adjacent to prestigious postcodes that have good infrastructure and transportation links such as Belsize Park, Shoreditch, West Hampstead and Maida Vale. Among the prime central London areas,
Clerkenwell has become a highly performing area. With the current expansion of Farringdon Station due to the incoming Cross Rail network, property prices have grown annually six to eight per cent bringing prices back to the peak of 2007 with further gains to come. The rarity of loft and warehouse conversions in Clerkenwell and Shoreditch in an age of new build developments has meant prices are continuing to climb in light of rising demand as well. Cash buyers will remain an important
factor in 2012. Within the £400,000- £600,000 range, 25-30 per cent of our customers are cash buyers who look to complete the full purchasing process within two weeks to secure their properties demonstrating how demand is intensifying for properties. The rental market has been particularly
buoyant with an average of five tenants competing for every property, demand has significantly outstripped supply. As a consequence, rental prices are likely to continue to show growth, pushing rental rises out to the outskirts of London as renters will be unable to stretch their budget.
Nick Barnes, Head of Chesterton Humberts Research
2012 is a year of opportunity for well-placed buyers to invest in residential
property. There has never before been a set of circumstances similar to those we are experiencing now: interest rates are at an historic low; house prices are on average around 11.5 per cent lower than in November 2007 across the country; supplies of new homes way behind government targets; pent-up demand from frustrated buyers due to lack of lending; and confidence in other asset classes such as bonds and equities at rock bottom, driving more and more investors to safer assets such as property and gold. There is clear downside risk from the
prevailing economic environment, however, these market conditions will not last forever and while they do, this really does represent a very interesting opportunity for those willing to put their faith in property.”
In most local markets, two or three agents are doing well, with the rest sharing the crumbs.’ Mike Bidwell, CEO, Intero UK
Steven Lees, Director at SmartNewHomes Housebuilders face further uncertainty in 2012, with spending cuts, rising unemployment and downgraded growth forecasts, but the majority have streamlined their operations and are in robust shape. They are building in smaller volumes in areas where there is a proven strong demand, selling quickly before moving onto the next project to limit exposure. The Government is recognising that there is a major opportunity for the UK to build its way out of recession,
reflected in planning policy, housing strategy and its commitment to major infrastructure projects. We hope that this will enable housebuilders to increase volumes, create jobs and provide a much-needed boost to the economy next year.
12 JANUARY 2012 PROPERTYdrum
Roarie Scarisbrick, Property Vision The outlook for 2012 is not easy to predict and anyone who tries is guessing. In London, we expect to see a
continued upward trajectory in the super prime areas, while the secondary, more domestic areas are likely to flatten-out. In the country, there is little reason to expect sudden gains, but we are expecting levels of supply to further contract, because low interest rates and high transaction costs provide little incentive to move. The silver lining amongst the dark clouds is that this appears to present an opportunity for those intending to buy in the country, especially those who are also selling in town.
Mike Bidwell, CEO, Intero UK We are most likely to see a repeat of 2011 but that could be massively influenced by what’s going on in the Euro zone! Logic suggests that central London will remain ‘hot’ with more international money coming into an already strong market, underpinned by large amounts of equity and cash. This should have a rippling out effect to areas around the M25 and immediate home counties. The wider market will continue to influenced by the difficulties in obtaining mortgage finance, pressures on household income and fragile levels of confidence. I expect to see investor buyers remaining active and developers are returning so there are still reasons to be optimistic. From a pure estate agency point of view, in just about every local market that I am familiar with, moderate number of agents seem to be doing well – maybe two or three – with the remainder sharing the crumbs left on the table. The future remains bright, however, for forward thinking and innovative estate agencies, particularly those with strong lettings departments!
Do you have any views to share?
www.propertydrum.com/articles/predict2012
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