Inside Access. Residential Market Review November/December 2012

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1 Residential Market Review

2 Research Looking Ahead to 2013 Adam Challis Head of Research The Hamptons International market forecasts have now been released. In line with most commentators, we expect a fairly muted performance for the housing market next year, held back by conservative mortgage lending practices. The economic backdrop remains uncertain, with 2013 GDP growth expectations of around one per cent. However, continuing improvements to UK employment levels can be taken as a positive signal that consumer sentiment (and spending) may begin to take firm hold early in the year. As a result, Government is likely to see increased taxation revenue, taking some of the pressure off the fiscal balancing act of the past couple of years. Taken together, we anticipate modest house price growth next year in most regions. Importantly, this stability will underpin improving confidence from purchasers and lenders, which we expect will provide the platform for improving market conditions over the next few years. Hamptons International 2013 Forecasts Prime Greater London South of England 2013 House Price Forecasts 0% 0% 2% 2% Rents Forecasts -1% 2% 2% 0% UK UK Residential Sales Sales Market Bounce Marc Goldberg Head of Sales goldbergm@hamptons-int.com The property market continued its resurgence in October and we recorded an 18 per cent increase in the number of new properties available for sale compared with last year. At the same time, the number of new purchasers also increased, up 12 per cent from October A further boost to activity came from a lower fall-through rate, meaning that buyers and sellers are more likely to commit to a deal once agreed. This is good news for vendors, who can act with greater confidence once a buyer has been secured. There is typically a lull in activity towards the end of the year, but based on current strong performance, it would appear this may not fully materialise. It also suggests that demand will be buoyant in January 2013, which will make it an excellent time for vendors to consider selling UK Mid-Term House Price Forecasts 2% 2% 2% 4% 1 2

3 Mortgages UK Residential Lettings Post- Olympic Bounce Lesley Cairns Head of Lettings Funding for Lending: Shuffling the Deck Chairs? Gareth Herbert Sales Director Capital Private Finance The central concern with the Funding for Lending programme, launched by Government in July, is that it may end up only helping those that don t really need it. This would be unfortunate and falls well short of the aims of improving accessibility in the mortgage market. Four months on from the programme launch and it appears that this might turn out to be the case. Rates for mortgagors with low Loan to Value requirements have reduced, but there has not been a material increase in the volume of high Loan to Value mortgage products on the market. The most recent data from Countrywide shows that the proportion of mortgages written above 75% Loan to Value has even modestly contracted, while the share of high equity loans has increased since Q Although helpful to equity rich purchasers, this response from lenders is not helping to lubricate housing activity at the lower end of the housing ladder. Government and banks need to find a strategy that improves the risk scoring for purchasers such as first time buyers. Unlocking this important purchaser profile is the key to improving housing market activity across all levels. Your home may be repossessed if you do not keep up repayments on your mortgage. There will be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances and loan amount. The fee is up to 1.5%, but a typical fee is 0.67% of the amount borrowed. MAB 5590 The lettings markets across the South of England responded strongly in October, following on from record summer activity. The market appeared to pause for breath in September, with activity slowing somewhat after the record levels in August. There was some concern that the post-olympic bounce would fail to materialise and the inner London rental market may be heading towards a seasonal slowdown. Instead, activity levels were at an all-time record for the month of October. This was driven by an uptick in demand, notably in our country offices that experienced a 21 per cent increase in new applicants. This may put some upward pressure on rents in these markets where the supply of available properties continues to be an issue. In contrast, London supply levels are high, which has pushed up the viewings per deal ratio and means that prospective tenants can feel spoilt for choice. In this market, rents must be priced competitively and heading towards year-end we continue to advise landlords to prioritise low void periods over holding out for the elusive rental premium. 3 4

4 50% off your first month s rent For further information and details of the properties to which this offer applies, please contact your local Hamptons International. Beyond your expectations 5 6

5 Drawing on over 140 years of experience, Hamptons International is one of the premier international residential agents with a network of more than 85 offices in the UK and key overseas markets. We continue to expand to be one of the most valuable and innovative residential property groups in the world. Our name is synonymous with an unrivalled level of expertise and the finest properties. Our services include: Sales Lettings Residential Development Valuation Land & Professional Services Property Management Mortgage Finance Corporate & Relocation Services Interior Solutions M5 Broadway Banbury Deddington Buckingham Cheltenham A1M M5 M4 Painswick Stroud Cirencester Bristol Bath Marlborough LONDON Muswell Hill Hampstead Islington St John s Wood Paddington Ealing Notting Hill Mayfair City Kensington Knightsbridge Chiswick Chelsea Sloane Square Pimlico Tower Bridge Barnes Fulham Battersea East Sheen Richmond Putney Clapham Teddington Dulwich Wimbledon Balham Kingston upon Thames Oxford M3 M40 Henley-on-Thames Newbury Winchester Great Missenden M4 Marlow Maidenhead Sunningdale M3 Fleet Farnham Alton Chichester M1 Rickmansworth Beaconsfield Gerrards Cross 28 London Offices Mayfair Windsor (Head Office) Esher Weybridge Guildford Godalming Haslemere Liphook M25 St Albans Epsom Dorking & Reigate Horsham M23 Caterham M11 M25 M20 Sevenoa Tunbridge Wells Haywards Heath Brighton & Hove Adam Challis Head of Research challisa@ hamptons-int.com Richard Valentine-Selsey Assistant Research Manager valentine-selseyr@ hamptons-int.com. This report was published for the purpose of general information and Hamptons International accepts no responsibility for any loss or damage that results from the use of content contained therein, including any errors or negligence from third party information providers. It is your sole responsibility to independently check and verify the facts contained within this report. All opinions and forecasts within this report do not in any way represent investment or other advice. Reproduction of this report in whole or in part is not allowed without the prior written consent of Hamptons International