From initial reservations about the strength of the property market at the start of the year to the unexpected uplift in house prices as the year progressed, 2011 was not an easy year to predict. Against a continuing environment of uncertainty, we ask the experts what they think we have in store this year and beyond.
London’s property market will continue to our perform the rest of the country, with prices falling around most of the country while the capital sees only a modest fall, according to Kay & Co managing director Martin Bikhit. Central London will buck the trend with a price rise. Bikhit says the rental market will continue to see price increases of three to four per cent, which could continue for around five years.
Camilla Dell, managing partner at Black Brick Property Solutions agrees, saying prime central London (PCL) locations including Mayfair, Knightsbridge and Belgravia will see price rises, albeit at a slower rate than last year. She adds that a bad year for bankers’ bonuses is likely to soften prices at domestic buyer hotspots like Fulham, Putney and Battersea.
Howard Elston, associate director of Aylesford International says International buyers will continue to dominate the high-end market as political turmoil in other parts of the world creates a steady supply of buyers. He says a lack of supply for high end properties will continue to drive fierce demand, with most selling as soon as they come on the market.
There is “almost no limit on price per square foot,” in PCL, according to Gary Hersham, partner at Beauchamp Estates, with London remaining one of the most desirable locations in the world and economic woes having little influence at this end of the market.
The inclement economic conditions mean there are fewer corporate tenants, says Catherine Cockcroft, head of rentals at Aylesford International. However, many potential first time buyers are continuing to rent rather than purchase as they fear for their job security, meaning there is unlikely to be an easing on rental prices.
If the economic situation improves and construction bounces back, the emphasis will be on bigger flats, says Giles Underhill, a director at Vision. He said: “More thought put into the design process as developers increasingly think of the requirements of the owner-occupier rather than producing small flats for the rental investor.” We will also see “more daring and interesting modern architecture” as buyers’ tastes change.