Hamptons International believes the country is close to hitting the bottom of the property market, following healthy levels of trading during the last three months and the presence of several distinct factors witnessed when we came out of the last recession in the early 1990s.
Buyer registration figures from April reveal a 13% rise, when comparing the same period in 2008. This rise has been converting into increased viewings and sales, with sales agreed up 27% in April 09 (compared to April 08).
Hamptons’ figures also highlight that a significant change in supply and demand has taken place within the UK sales market. The number of new instructions is down 40%, when compared to the previous year, whereas the number of applicants is up 13%. As a result the balance of power is moving back to vendors and new stock is required to meet current demand.
In addition, prices are beginning to stabilise across both the London and country house markets. Having fallen by approximately 25-30% since the peak of the market in July 2007, the agency is now witnessing more competitive bidding and occasional gazumping.
There are signs that the market is following the same path as the market did when it recovered in the 90s. Firstly, with the London market and activity picking up initially and then rolling out to the Country and secondly, the middle market reviving and the top end remaining problematic. When house prices started to fall in 2007, it was the mainstream market that was hit first and the top end (£3m +) continued to perform well until March 2008. The top end is now behind the curve and continuing to suffer, which has happened in every previous recession – and it is the mid-market that is beginning to recover.
‘The start of 2009 has definitely gone as well as expected and we are beginning to witness healthy levels of trading. As a result, we remain cautiously optimistic about the market barring any unforeseen economic crises. Given activity levels over the last few months, we see the market entering a period of stabilization for the remainder of 2009, and although we do not expect any house price rises in 2009 – we do not predict any further falls,’ says Marc Goldberg, head of residential sales, Hamptons International.