House Price Divide Will Reverse in 2013, Says Hamptons International
LONDON, November 6, 2012 /PRNewswire/ --
Hamptons International expects growth in the UK and South of England property market while London will remain flat
2013 Forecasts Summary
South of
National England London PCL
House Price Forecasts +2% +2% 0% 0%
Rental Price Forecasts 0% +2% +2% -1%
2013 2014 2015 2016
UK Mid-Term House Price Forecasts +2% +2% +2% +4%
The property market across the UK and in the South of England will see growth in 2013 while prices in Prime Central London and Greater London will remain flat, according to Hamptons International.
Hamptons International forecasts a modest increase in transaction levels to 720,000 across England, Wales and Scotland, equating to a one per cent increase on the expected level for 2012 but barely half the level of a normal market for the sixth year in a row, Government schemes, a more competitive mortgage market as well as pent-up demand from buyers are expected to improve conditions in the UK property market.
Hamptons International predicts that mainstream property prices will grow by two per cent next year and will see a continued recovery over the next three years. The South of England will also benefit from growth of two per cent which will be driven largely by London buyers looking for more value but still within commutable distance from the Capital. Prices in Greater London will remain flat and the astronomic growth in the PCL (£2m-£10m) market will come to an end in 2013 with a flat market expected throughout next year.
The 2013 property market will be characterised by:
- An expected 720,000 transactions across England, Wales and Scotland, representing continued 'half-market' conditions and driven by continued constraints from the mortgage market
- A steady outlook for 2013 in which the mainstream property market will see growth and London will stabilise
- An optimistic outlook for the coming years with growth in house prices of between two and four per cent per year over the next three years
- Activity will be propped up by Government-backed loan schemes such as Funding for Lending
- A better performance from commuter areas in the South East of the UK with 'no compromise' homes achieving high levels of interest, multiple bids and over-asking price offers
- Prime Central London will continue to be negatively impacted by recent Stamp Duty Land Tax changes but partially supported by limited supply in Prime Central London. The super-prime market (£10m+) will continue to grow.
Marc Goldberg, Head of Sales, Hamptons International, commented:
"We're expecting the value gap between PCL and the rest of the UK to begin to slow and stabilize next year. PCL has been badly impacted by Government policy this year and since Spring, we have seen price falls of around two per cent in the £2m-£10m market. While we anticipate further drops in the early part of next year, we expect these to recover and stabilize over the course of the year once the Government announces its direction of travel regarding its policy on the proposed annual charge and capital gains tax.
"Outside of PCL and Greater London, we're predicting growth in the UK market. Commuter belt areas across the South of England in particular will be an interesting story with increases driven by price-sensitive London buyers who are seeking more value for money."
Adam Challis, Head of Research, Hamptons International, added: "Next year will kick off the long road to recovery for the housing market. Transaction levels will operate once again at half-market levels but we will start to see some positive results from Government schemes and a growing mortgage market. Over the medium-term, we are optimistic regarding house price improvements as real wage growth returns and economic activity picks up."
Meanwhile, the rental market next year will be extremely localised, driven by the regional balance in rental supply which will temper growth in local rents. On the whole, Hamptons International expects the UK rental market in 2013 to remain flat but gains will be seen in the South of England (2%) and Greater London (2%). Prime London prices will soften as tenants seek better value in Zone two and three locations and the number of family homes in the Capital's most desirable locations continue to outweigh supply.
Lesley Cairns, Head of Lettings, Hamptons International, commented: "Over the course of 2012, we have seen divisions emerge in the UK lettings market both regionally and by property type: London has been over-supplied and has seen softening in certain parts of the market while the Country market is the mirror opposite. While this was in part driven by an unusual year for London as host of a number of national celebrations, the differing supply levels will drive a modest fall in Prime Central London rents."
About Hamptons International
Hamptons International is a leading residential agent operating in London and the South of the UK. With more than 140 years of experience in the property market and a commitment to industry innovation and exceptional levels of customer service, Hamptons International today offers a wealth of award-winning services including UK and international Sales, Lettings, Property Management, Corporate Services, Residential Development, Development Land and Valuation, and Property Finance.
Headquartered in London's Mayfair, Hamptons International has an international network of more than 85 offices and is a subsidiary of Countrywide, the UK's largest estate agency and property services group.
Note to editors:
For media enquiries please contact:
Aisling Gray, Senior PR Manager, Hamptons International
+44(0)20-7758-8422 / +44(0)778-611-8634 / [email protected]
SOURCE Hamptons International
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