Hamptons has forecast that UK house prices will rise by approximately 3 per cent during the next twelve months, while sales volumes will fall back to the long-run average of -8 per cent.
The number of new buyers to each new seller stands at six to one now, rather than the 8 to 1 at the beginning of the year.
Confidence will return as we move into the second half of 2008, but Home Information Packs (HIPs) will continue to delay the frequency of properties coming to market.
Despite this projected delay, Hamptons expect a 10 per cent uplift in the number of properties coming up for sale compared to 2007, and a drop of around 10 per cent in applicants registering to buy.
It says that this will effectively see the market return to normality after an 18 month period of frenetic demand and tight supply.
For buyers, there should be a greater selection of properties available and with downward pressure on interest rates, the cost of borrowing should become cheaper.
For vendors, in spite of the negative speculation, there are still more buyers than properties to sell and if a property is realistically priced, it should certainly sell without too much trouble.
London
North London will outperform South London by 1 per cent (4 per cent versus 3 per cent), while other areas will rise by a relatively modest 2.5 per cent.
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.
Southern Counties
Hamtons expect to see a marginal upturn in 2008, following the fall in 2007 and lack of buyer confidence. Across the South overall prices will rise by 2.5 per cent.
Certainly prices will dip in the first quarter, however it will be a buyers market - with the majority of buyers those that have to move, rather than those that would like to move.
Come the spring and summer, which are traditionally the busiest times for the property market, we will see a double market, i.e. those that were going to move anyway and those frustrated sellers/buyers that didn't do it at the end of 2007 or early 2008.
With this taking place, house prices will start to increase for the remaining six months of the year and would catch up with the negative change in the first quarter.
Ashford, Dorking, Horsham – down to South coast offer the strongest investment potential for buyers in 2008.
Western Region
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.
The expectation is that spring of 2008 will show a significant uplift in the number of properties reaching the market for sale and as a result market activity will increase.
House prices in the West Country should remain steady – with a price increase of no more than 2.5 per cent.
