Reports of a five year peak in prices for residential real estate in the United Kingdom real estate market are fueling hopes of recovery. Sales performance for London’s prime property is a great sign, although there is still some lingering investor pessimism about the industry as a whole. See the following article from Property Wire for more.
Residential property prices in England and Wales have reached a five year high, according to the latest land registry figures with others reporting a strong demand for prime real estate in London.
The Land Registry, which records all completed property transactions and is widely regarded as producing one of the most authoritative house price reports, says that prices increased 1.7% in July, the strongest monthly growth since July 2004.
It compares the price of properties sold now with the price paid when they were sold previously. But it does lag behind data from lenders and repossessions and property transfers following a divorce are excluded.
However, it reinforces the recovery in the property market that has been revealed in a series of surveys in recent months, including the Nationwide building society’s index which is based on mortgage data, which showed that prices rose by 1.6% in August compared with July.
And the latest figures from Savills show a resurgence in the prime London residential property market led by foreign real estate investors and City financiers. It says it has agreed 52% more sales than this time a year ago and viewings in London are up by 23%, their highest level for three years.
Savills chief executive Jeremy Helsby said improvements in its market were being underpinned by cash-rich buyers targeting quality stock which is in short supply. Domestic buyers tend to be from the City, Helsby said, despite the financial crisis and a potential crackdown on bonuses, while overseas buyers have been attracted by the sharp drop in the value of sterling.
London agent Douglas & Gordon is similarly upbeat, announcing that July this year was its best month since July 2007 and the second-best month in its entire 51-year history, in terms of applicants and sales agreed.
It says nearly 1,300 buyers a month are signing up and that it recorded nearly 100 agreed offers last month – 90% of July 2007 levels. A year ago, its applicant levels were a third of what they are now, with half as many sales.
‘We’ve seen south-west and central London rise by 1% a month for four months. Lack of supply combined with more buyers is creating a bit of a stampede,’ said Managing director Ivor Dickinson.
But UK property prices will fall another 12.7% according 86.4% of respondents to a poll of mortgage-backed debt investors by the Royal Bank of Scotland.‘General opinion was that UK housing has another down leg to take,’ it said. It contradicts all the other evidence that the real estate market is recovering including a report two weeks ago from the highly respected Royal Institution of Chartered Surveyors which said that prices will increase this year, reversing an earlier prediction of a drop of as much as 15%.
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.