AN INCREASE IN HOUSE SALES PREDICTED FOR CENTRAL LONDON IN THE SECOND HALF OF 2009

Research produced by London agent Hurford Salvi Carr in their Midtown, City and Docklands Residential Review 2008 reports that there is a strong chance that the number of property transactions will slowly start to increase in the second half of 2009.

Buyers, many of who are currently in rented accommodation will be tempted back to the property market by lower asking prices, historically low interest rates and an increase availability of mortgages following Government pressure to force the banks to offer realistically priced mortgage products.

The report confirms a growing East West divide across London with central areas around Holborn, Bloomsbury and the West End seeing modest falls in values of 10% in 2008, the City and City fringe areas experiencing falls averaging 12% and that Docklands and East London has been badly hit with falls in residential prices averaging 17% during 2008.

A similar pattern is also reported in the letting market with Midtown rents down 5% , City rents down 8% and Docklands rents down 15%.

David Salvi, Director of Hurford Salvi Carr believes that “What happens in 2009 is very much in the hands of the banks. If the banks start lending again on competitive terms and in a low interest rate environment, there is potential for the large number of buyers currently in rented accommodation to re-enter the market in the second half of 2009, provided they are confident and secure in their jobs.’

‘In the short term we see residential prices continuing to fall in the first half of 2009 before we expect to see an easing of price falls in the second half of the year, responding to an anticipated increase in the number of sales transactions at new lower price levels.’

The report pinpoints that tenants have been the short-term winners in the current market with an improved choice of quality homes, often designed for or by owner-occupiers, in some of London’s best locations at increasingly affordable rents.