It expects mainstream sales values across the UK to fall by 2% while the South of England is predicted to experience similar conditions to 2011, with levels remaining flat.
The London market will continue to attract buyers and investors and drive market conditions, with prime London in particular expected to see a 4% increase in sales values over the next 12 months.
Based on several key assumptions, Hamptons International expects the sales market next year to be affected by exchange rates which will support international demand in prime central London. But mortgage rates could be favourable as few analysts are expecting the Bank of England to increase the base rate.
Overall it predicts that country markets in the South of England will see a modest decline from the flat market of 2011 and the rest of the UK is expected to improve modestly but this will only slow the declines of 2011 rather than produce positive price movements.
‘Set against a backdrop of continued economic uncertainty, we are expecting the 2012 property market to be a more conservative re-run of 2011,’ said Marc Goldberg, head of sales at Hamptons International.
‘We expect to see a marginal increase in transaction levels throughout 2012, with much less diversity in price movements, just as we expect the declines in activity in the South of the UK and nationwide to slow, so too do we expect the sometimes meteoric rises in prime central London to moderate,’ he explained.
The rental market has been strong in 2011 and moving into 2012, Hamptons International predicts this to improve marginally, with 2% growth across the South of the UK. The London lettings market is expected to see more growth, with a predicted 5% increase in Rental demand is expected to remain strong for the mainstream market, with some softening of the market at the top end due to economic uncertainty.
Hamptons said that high rents in central London will continue to push demand further out as renters are unable and/or unwilling to stretch budgets. This will support rental growth in areas of Inner London such as Islington, Ealing, Clapham and further out towards Wimbledon, Richmond, Esher and Guildford.
‘We are expecting the rental market boom to continue in prime and Greater London, driven by a continued imbalance between supply and demand. For the first time ever, the private rented sector will house more people in the UK than the social rented sector, which will put continued pressure on prices,’ said Lesley Cairns, head of lettings at Hamptons International.
‘Rents are likely to continue to rise, although this rise will be moderated as tenants find ever more creative ways to make life more affordable. We are already seeing increasing numbers of flat sharers and outmigrators looking for a similar quality of stock and location but prepared to move from zone one to zones two, three and four to find it. Both of these trends are likely to become more widespread throughout 2012,’ she added.
