Prime market sales values in the South East are forecast to rise by 29.8 per cent over the next five years and mainstream sales values by 25.5 per cent. However, it's not all bright news for homeowners. The latest research from estate agent Savills anticipates that mainstream and prime property prices will experience a secondary "slip" in 2011.
Yolande Barnes, head of residential research at Savills, adds: "The market will be characterised by subdivisions defined by location, property type and the nature of occupier demand and it
is these divisions that will dictate the scale, timing and sustainability of future price growth."
Justin Godfrey, head of Savills in Barnet, says: "Our turnover by year end is forecast to be 27 per cent up on last year. This reflects a buoyancy in the market, fuelled by vendors and purchasers, both of whom are equally serious about moving home. While securing finance has at times slowed down the sales process, it has not been enough of a deterrent to diminish demand for high-quality, realistically priced property.
"Our portfolio, which covers all prime areas between Mill Hill in North London to Hertford in the middle of Hertfordshire, as well as Barnet, is due to grow considerably in the New Year as we have been instructed to market several impressive new developments. In addition, the opening of a new office in St John's Wood in 2011 will further strengthen our links with our London offices, including Hampstead, with whom we already work very closely."
Top-end estate agent Glentree International is equally bullish. Glentree's Trevor Abrahmsohn says: "London will fare better than the rest of the country, particularly the Midlands and North. Public sector cutbacks will affect these areas where the picture, from a property perspective, could look different from London.
"The UK economy is growing faster than anyone would have anticipated. Manufacturing and exports are exceeding expectations. Fears of deflation could be overdone and further indulgences with quantum easing may not be necessary. Inflation may be more under control than one would have thought hitherto. Mortgages are becoming lower-risk investments and money more plentiful for this purpose. Sellers are moderating their aspirations and taking offers closer to value than asking price and while purchasers are less plentiful, they will buy when they see value and that will increase liquidity in the market. Shortage of stock in parts of London will drive prices north."
Mr Abrahmsohn has particularly fond words for new schemes. "New developments are few and far between and will whet the insatiable appetite for new-home demand. Buy-to-lets are becoming fashionable again, given low yield on cash and uncertainty of capital markets. The increase in tenant demand in London is driving up property rental prices by probably 10 per cent per year. Bonds will become less attractive as interest rates increase.
"There will be the usual schism between London and the rest of the UK, since the latter will take at least a year or so to recover its composure."
That is good news for developer Fusion Residential. It is selling Pennywell Manor in Elstree, Hertfordshire. This property has planning permission to substantiality extend and refurbish the existing building to produce a five-bedroom home with four en-suite bathrooms, reception, hall, drawing room, dining/family room, custom-built kitchen with utility room, TV room, study, gym and double garage.
There is about an acre of mature grounds with views across green-belt Hertfordshire countryside, London and beyond to the Surrey Downs. Pennywell Manor is to be sold by tender, with a closing date of December 15, 2010.
