UK Property Market Review 2011

With London prices and demand for quality properties continuing to outperform the provinces, the country house market  has continued to struggle to keep pace.

It is well documented that the strength and performance of the London market will determine how the demand and the market generally will react and perform in the commuter areas outside of London. However, with London transactions showing significant and robust activity it continues not to be affected by the world financial issues.

But Why?

The London property market is currently and will continue to be reliant on International buyers looking to spend or invest in what they consider to be a ‘safe haven’ for their Euros and Dollars. The international buyers have proved to have much less influence and impact in the Country house sector as nearly 65% of buyers buying Country Houses are British compared to about 40% in London.

It is not anticipated that the international buyer will be tempted or influenced to look at areas such as Surrey or Berkshire, they will for the foreseeable future continue to buy in London in the key popular areas including Mayfair, Belgravia, Knightsbridge and Kensington.

Outlook

We are always intrigued to identify who and where the demand for houses is coming from. Our less than optimistic forecast for any significant change is based on an assumption that the wider UK market and economy will see more troubled times. There is a strong probability that European political financial and economic issues will continue to encourage buyers into the UK, especially at the top end of the market and to properties in the Capital.

With Russian, Chinese and areas in the Arab states all with their own political issues and uncertainties, buyers who can extract their wealth from their respective countries will continue to make investments outside of their home region.

However, if the strength of the Pound starts to improve the demand from the international buyer will surely have an impact on the current levels of demand?

As we start 2012 the indecision and uncertainty surrounding the future of the Euro remains a critical factor. Whilst there is speculation that the return of individual national currencies could become reality, it is considered that the failure of the Euro as the main currency in the near future would have catastrophic consequences. Both France and Germany cannot allow this to become a realistic option.

The UK property market is likely to be influenced on matters such as: Despite the somewhat gloomy and downbeat predictions that directly affect the property market there continues to be a steady flow of quality buyers looking to buy or rent in London and the Country.

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