2011: So That's That, Then

Suddenly, 2011 is over.

This week I have been contacted by four property businesses - two of them amongst the old school top end estate agents, two of them better described as property consultancies even though they also sell some homes - talking about their forthcoming predictions for what the UK housing market will do in 2012.

On the ground it seems the same. Two estate agencies, at different ends of the price spectrum, have had their ‘national open day’ PR events to try to rustle up buyers, mainly for homes that have not shifted since the spring. For different stories I was writing this week, several other agencies came up with reduced-price properties - one calling them ‘end of year offers’.

It must be genuinely difficult for estate agents to keep momentum, even this early in the autumn, when every word from government ministers makes the economic mood music still more sombre and every set of figures from government departments prove them right.

The forecasts for 2012 will therefore be interesting - if, perhaps, a little predictable. From early discussions there will be five themes:

Firstly, struggling transaction numbers: many believe that 2012 will see even fewer sales than 2011, even though transactions this year are about 50 per cent of 2006 levels;

Secondly, the continuing strength of the rental market (if you are a landlord) or the expected crippling rise in rents (if you are a tenant) will be a big story. A sub-text of this story will be the difficulty for individuals in obtaining buy-to-let mortgages - just as the rental market could benefit from an influx of new stock;

Thirdly, the demographic profile of those who do buy, sell and move house will become older, wealthier and more concentrated in the south. Younger, less well off people everywhere, especially in the north, will be too wracked by uncertainty to even think about it;

Fourthly, the Olympic effect. It will be difficult to pick the extravagant claims away from the reality on this. Expect some property hyperbole worthy of David Coleman;

Fifthly, and inevitably, central London will probably continue its extraordinarily strong bull run, although even here there may be fewer transactions than in recent years. The publicity from the posh ‘top table’ estate agents in particular will be skewed to talk more about London - for them, any 2012 preview is about fees rather than ordinary people.

Propertynewshound will cover all the major forecasts, starting later this month. In the past, such predictions were dominated by Savills and Knight Frank; this time, with those big boys increasingly pre-occupied with high net worth purchases at the stellar end of central London and other world cities, expect other agents and consultancies to make more headlines with their forecasts for the mainstream markets.

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