There was a time, not so long ago, when Strutt & Parker did not really give forecasts - more broad observations. These days the agency is very much sharper.
It has a three-person research team led by Stephanie McMahon, a network of 49 mostly-residential offices across England and Scotland, a small but expanding residential development division, and it serves as UK affiliate of Christie’s International Real Estate. The latter gives it access to the international buyers crucial to its bread-and-butter offer - high end properties in central London, major provincial cities and across Britain’s rural areas.
Its voice is therefore more authoritative than before and these are its headline predictions for the year ahead:
- mainstream UK housing market will end 2013 up 4.5 per cent on late 2012 and will rise a further 4.0 per cent in 2014;
- shadows over the mainstream market are from uncertainty over the direction of monetary policy from the Bank of England, and from sluggish productivity and wage growth, but such risks are “subdued” ;
- Prime Central London is “largely driven by international investors looking for a safe haven asset” with 44 per cent of buyers in PCL in the year to September 2013 being foreign, and considerably more in some sub-markets like Knightsbridge;
- Prime Central London prices will end 2013 some 6.0 per cent up on 2012, but rises in 2014 and 2015 will be 3.5 per cent and zero respectively - “a stark contrast to 2010 and 2011 when PCL prices surged by over 13 per cent year-on-year” notes McMahon;
“The biggest perceived uncertainty surrounding Prime London is the looming election. Markets may not react as nervously as expected to the potential for a Mansion Tax and it may be that transactions decrease but values hold better than expected” says Stephanie McMahon.
These are the figures from Strutt & Parker and economics consultancy Volterra:
2013 PCL +6.0% and mainstream UK +4.5%
2014 PCL +3.5% and mainstream UK +4.0%
2015 PCL no change, and mainstream UK +3.5%
2016 PCL +6.5% and mainstream UK +4.5%
If you would like to to comment on this article, click HERE to e-mail Graham.