The property market in 2008 will witness a 3-4% rise in prices with prime central London outperforming the market south of the Thames, according to Hamptons.
The estate agents anticipate that buyer confidence which has suffered recently from reports of the credit crunch, rising unemployment and slowing of economic growth, will pick up in the second half of the year.
Buyers should benefit from a greater selection of properties available and if the Bank of England continues to lower interest rates, the cost of borrowing should become cheaper (providing the cost of inter-bank lending also falls).
The London property market has settled down after a two year period of record levels of demand, which led to spiraling prices (up 35-40%) and a shortage of properties for sale (stock 21% down on previous year).
However, the signs of increasing supply and buyer numbers returning to more normal levels have been more apparent in the closing months of 2007, say Hamptons. While there is much negative speculation around and no doubt that the credit crunch did create an initial ‘shock’ to the market, they have found that buyer confidence is gradually returning and are hopeful that there will be reasonable trading conditions for most of 2008.
Hamptons believe that Paddington, Bayswater, Kings Cross and Islington are likely to see the greatest capital * appreciation in 2008, given the continuing regeneration of Paddington Waterside and the Kings Cross area.
The extreme top end (£3m+) should remain strong with demand from the super wealthy far outweighing supply.
Predictions from Hamptons
Across the South, Hamptons predict overall price rises of 2.5%.
Ashford, Dorking, Horsham ? down to South coast offer the strongest investment potential for buyers in 2008.
* Properties in the West of England
Throughout 2007, the West Country has suffered from a lack of properties coming to the market. There was a noticeable increase in stock during May prior to HIP?s being delayed until August but apart from this stock levels remain depressed.
House prices in the West Country should remain steady ? with a price increase of no more than 2.5%.
* Country houses (£2million plus)
The froth has come off the market in the last third of 2007. The Northern Rock crisis and credit crunch created a certain amount of panic and dented buyer confidence. This has resulted in the readjustment of pricing and it is evident that over ambitious vendors have taken it on board.
West Surrey continues to follow in London?s footsteps with village locations within 20 ? 30 minutes of a good London commuter station remaining the hotspots. The finite number of period houses in the £1.5 million + bracket results in increased interest in top-end new-build houses.
Prices well in excess of £3 million will be common – place for new country houses to supply the increasing demand from city buyers interested in a lower maintenance country house.