It's about this time when people start to speculate about what will happen in the property market in 2012. Commentators, journalists, surveyors, mortgage lenders and estate agents will, no doubt, in the next 2 weeks give their opinion on house prices and the state of the housing market. With the backdrop of a fragile UK economy, the ongoing crisis in the Eurozone, the emerging far east economies, and the slower than expected US recovery, it is no wonder that these predictions can vary wildly depending on which organization or individual you talk to.
On the whole, the year ended more positively than it begun, with a continuing upward trend in new buyers registering, more sales being agreed than the previous quarter, and prices - in London at least - continuing to rise. The outlook for the UK, although hardly rosy, isn't as bleak as some had speculated throughout 2011. The British Chambers of Commerce has recently stated that whilst the economy is still struggling, it is far from certain that the country will slip into a second recession. The Royal Institute of Chartered Surveyors December report stated that although the market will remain "subdued", sales per surveyor are close to the highest levels since Autumn 2010.
More importantly, and fortunately, for London there is a constant market force which keeps property transaction levels alive - supply and demand. London, even in these tough economic times, is still seen as a financial centre, a city of opportunity both for jobs and lifestyle, and an aspirational place to live and work. It is this "London Effect" which keeps property prices stable or rising. I'm not just talking about Far Eastern investment into Mayfair and Knightsbridge. This effect can be seen in almost every one of my London regional offices. New graduates from around the country moving to London to find work and opportunity, couples with young families moving just a few streets away just to find an extra bedroom or that catchment area for a primary school, and buy to let investors returning to the capital to count on stable or rising yields rather than make risk-filled forays further afield.
In addition, there has been resurgence in the number of first time buyers coming to the market, eager to purchase before the end of the stamp duty amnesty. This is a great time to be a first time buyer in and around the capital, as the region offers a unique market stability, sheltered from the continued uncertainty of sentiment and pricing exhibited in other areas of the UK. These buyers should make the most of these favourable conditions before the March deadline. The Chief Executive of the NAEA Peter Bolton King has declared that after this date "the holiday is well and truly over for first time buyers".
The lettings market is still strong in and around the capital. Our market leading Sutton office, for example, ended the year with its best ever result, and in addition, Kingston, Tooting, New Malden, Whitton, Bromley, Wallington and Surbiton all surpassed expectation in 2011. This in an indication of the ever changing face of the private rented sector. Much has been written about reluctant tenants who simply can't afford to get on the housing ladder. But we are seeing other trends in this market. More and more couples and families now see renting as a credible and practical alternative to buying, particularly as their families continue to grow and their needs with schooling and transport change on a yearly basis. Rather than being forced into renting, they are choosing not to buy. This trend can be seen in almost every area in the London region, and is an indicator that the rental market will continue to remain buoyant in 2012.
Samuel Johnson wrote "You find no man, at all intellectual, who is willing to leave London. No, Sir, when a man is tired of London, he is tired of life; for there is in London all that life can afford." Looking at the diversity of the culture, the people, the demographics and the relative stability of the property market, it is hard not to agree.
Regional Managing Director - London
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