2012: Savills Adds To Downbeat Tone

For most of the country outside central London, houses prices will fall in 2012 even before inflation is taken into account says Savills - the third agency to make a gloomy forecast for next year and beyond.

Its forecast is split into three broad categories:

1. Mainstream housing market

- UK average mainstream prices now remain 9.5% from peak;
- likely to fall further 2.0% in 2012 before gentle rises until 2016;
- regional falls next year range from 1.0% in SE England to 4.0% in Scotland.

2. 'Prime' housing markets (Savills' natural sales market)

- Prime Central London already up an average of 15.6% from 2007 level;
- PCL to rise 3% next year and a total of 22.7% by 2016;
- PCL to rely increasingly on overseas buyers as UK bonuses and confidence falter;
- Regional prime markets to do less well, falling up to 6.0% next year;
- Even over medium term, prime regions not good...eg, Scotland up only 7% by 2016.

3. Rental markets

- PRS (now about 15% of England/Wales housing stock) to hit 20% by 2016
- Mainstream rental markets to rise 3%-4.5% pa, by total of 20.5% by 2016.

One agency with a large research department still to report its forecast is Jones Lang LaSalle - an eagerly awaited prediction - although there will also be some 'mood music' reports, too, from other agencies and detailed statistical forecasts from business consultancies.

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