26/06/2008

Mixed news for property market

New research from Knight Frank highlights the state of the property market in central London and the South East.

The company’s Prime Central London Index for June 2008 indicates that the performance of the central London market (apart from super-prime properties – those valued at £10m+) has weakened considerably over the last two months. Prices for prime residential property fell by 1.5% in May – the fastest rate of decline since the early 1990s. Overall sales volumes are down almost 50% (May 2007–May 2008).

There is, however, some positive news: although the number of purchasers registering to buy is lower, it has only fallen by 20%. This suggests that, should the mortgage market recover later in the year, the property market should see an upsurge in activity.

Meanwhile, Knight Frank’s South East Residential Development Research Review 2008 reveals that the South East housing market averaged 7% capital growth in 2007, outperforming the UK average (5%) as well as Greater London (4%). It predicts that the South East will experience, at best, moderate price falls this year, as, despite the economic turbulence, demand there continues to outstrip supply.

The region’s best-performing local authorities varied considerably in terms of location and character. The traditionally affluent home counties locations, such as South Buckinghamshire and the Wealden area of East Sussex, experienced growth in excess of 19%, but similar levels of growth were achieved in coastal locations such as Adur (Shoreham-by-Sea) and Hastings, both of which are currently the focus of significant regeneration.

Six local authorities in the South East saw an increase in sales volumes in 2007: Wycombe, Bracknell Forest, Slough, Ashford, Crawley and Thanet. All are undergoing major regeneration, earmarked for significant new supply, or due to benefit from improved transport links.

Back