Two quotes from Knight Frank's Grainne Gilmore sum up the firm's pessimistic view of the housing market in 2012 and beyond.
"To achieve sales, sellers will have to cut their prices" says Gilmore, head of UK Residential Research for Knight Frank and a former Times economic correspondent. In addition she says: "Real-term prices will not reach their previous (2007) highs until 2028".
Here's a summary of what Knight Frank told property editors and correspondents this morning:
UK MAINSTREAM MARKET
- UK-wide average prices to fall 5.0% next year;
- Outside of central London, the smallest fall will be 3.8% (East Anglia) and the highest will be Wales (6.7%);
- values of mainstream homes will be static in 2013 before small rises in 2014 anf 2015;
- taking into account inflation (now 5.2%) this means further significant falls in the values of homes in the coming two years at least;
- transactions to stay low compared to five years ago, with concentration on older equity-rich owners forming the bulk of the movers.
UK TOP-END COUNTRY HOUSE MARKET
- Across the UK average values will fall 2.8% next year;
- Falls range from 0.7% (south east England) to 4.7% (north east)
- Second home market particularly badly hit in price- and transaction volume-terms.
PRIME CENTRAL LONDON MARKET
- Up 5% next year before staying flat in 2013 and then rises of 4%-plus thereafter
- Geo-political upheavals of recent months seem to have pushed more international buyers to London;
- Few risks to the continuation of this bull-run.
One interesting point made by Knight Frank concerned the coalition government's proposed planning changes. The firm believes they will, eventually, lead to more homes being built - but no more than 200,000 per annum from about five years' time, below the target and well outside the timeframe pledged by Grant Shapps.
I'll be reporting like this from all of the major forecast seminars in the next few weeks. Keep checking back or follow me on Twitter for details.
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