"No collapse in housing market" - Hamptons

Friday, 5 October 2007 12:00 AM

Despite recent data from the Halifax building society showing house prices are beginning to fall, there will be no dramatic long-term downturn in the UK housing market, according to analysis from estate agents Hamptons International.

While there may be further effects from the American sub-prime market turmoil, this will eventually pass through the market.

The market is fundamentally buoyant according to the estate agents.

"In the UK and Europe income growth remains strong alongside good employment figures," commented Giles Soutry, regional director at Hamptons.

"Inflation is currently slow and growth is on track so the justification for a further interest rate increase remains low in the UK."

Indeed, some sectors of the market have so far avoided a drop in prices.

"Prime property is still very buoyant, with a lack of supply driving the market, as well as the growth of high-net-worth individuals from abroad and the recognition of London as a main financial centre in the global markets," continued Mr Soutry.

The slowdown in the mainstream market is also no reason for panic.

"So the slowdown mentioned is not a cause for panic, but more the soft landing that we had predicted while earnings catch up a bit with prices, slight downward corrections in price take place (a ten per cent downward adjustment would still only take prices in the mainstream market back to where they were this time last year - hardly a disaster after years of sustained growth) and supply generally improves," continued Mr Soutry.

In the mid-term the market is likely to stabilise.

"With factors such as the number of people registering for properties up by 25 per cent during the last month compared to this time last year in most parts there is still a considerable demand for good properties sensibly priced, which would indicate that it still remains a good time to sell or purchase a property," concluded Mr Soutry.

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