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November 2009

Residential Property Focus

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  • Equity rich markets will be less susceptible to falls next year, although we expect prices to ease a little (-1.0%) as supply increases. City bonuses and overseas demand coming back to the top tiers of the prime market, are expected to help to sustain prices in the Spring markets in particular. More sustained growth from 2011. 
  • Prices look like they will end the year up by 3.5% to 4.0% (based on Nationwide's quarterly index) within the mainstream market. 
  •  We are forecasting price falls of -6.6% in the mainstream markets next year given lack of mortgage products, erosion of pent up demand constraints, gradually increasing supply and the overhang of unemployment. Thereafter a slow 2011, before a noticeable and more sustained recovery - so an extended W shape recovery. 
  •  Lowest falls and strongest subsequent recovery in the South East and South.
  • There are other scenarios (with lower probabilities) including a stepped recovery and a short term house price bubble, more details of which are on pages 8 and 9.

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Contact Information

Yolande Barnes
+44 (0) 20 7409 8899
ybarnes@savills.com
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