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Saturday, April 10, 2010

Flat outlook for British housing market

The British housing market is expected to be broadly flat this year, according to Jones Lang LaSalle (JLL).

The short-term outlook is relatively uncertain, despite a stronger than expected rebound in the last nine months of 2009, says James Thomas, head of residential development and investment at JLL.

Savills expects British property prices to soften, albeit marginally, over the course of the current year. — Reuters

House prices have been trending upwards since March 2009 but fell marginally in February, he says. London and south west London have seen far stronger price growth during the recovery. Thomas expects Britain’s average property prices to decline by up to 3% this year.

“Next year is also likely to be relatively stagnant, although it should be the year that firmer foundations are estbalished in preparation for stronger economic and housing market conditions from 2012 onwards,” he says.

According to a report by London-based Savills (Prime Residential Markets in London and Great Britain – January 2010), the prices of ultra prime properties in London remained 1.3% lower at the beginning of the year compared with the same period last year.

“Generally, high net (worth) individuals have been slower to return to a market more or less dominated by discretionary second home acquisitions,” it says.

“The prime markets in London, particularly the south west inner suburbs, were surprisingly strong last year given the extent and speed of the previous price falls of 2008.

Since the bottom of the market in March 2009, prices in prime central London and prime south west London have increased by 13.4% and 21% respectively.

However, on average, this still leaves prices in these markets between 10.2% and 12.85 below their peak,” the report says.

It says this year, the prime London markets will have to contend with the continuation of relatively weak economic conditions, the uncertainty that surrounds a general election and the prospect that improvements in earnings and purchasing power will be tempered by increased taxation.

Savills expects British property prices to soften, albeit marginally, over the course of the current year.

By The Star

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