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London property prices neutral in 2008

London property prices neutral in 2008

Friday, 14 December 2007 12:00 AM

Prices in the London property market are set to remain neutral during 2008, according to forecasts from Kinleigh Folkard & Hayward (KF&H).

The estate agent argues the next 12 months will see a moderation in prices, bringing to an end the frenetic market which has characterised the capital this year.

"2007 has been somewhat of a property rollercoaster; exceptionally buoyant for the first half of the year and then rapidly declining during the second half," said Lee Watts, managing director of KF&H.

"At the end of 2006, I predicted that we would see overall annual house price increases of between six and seven per cent in London, and I think this prediction was right."

Conditions seen in late 2007 are set to prevail into the spring of 2008, with prices even seeing a slight increase in quarter one as demand returns to the market.

This, however, will be reversed later in the year, according to KF&H.

"Due to this likely increase in activity and demand, combined with the continuing small levels of stock available, it is possible that we will see a small rise in prices during the first few months of 2008," continued Mr Watts.

"However, I believe that any such increases will be eroded away during the latter part of the year.

"Overall, house prices in London will remain neutral or even show a slight drop of maybe three or four per cent and I believe that we will see a much larger fall in prices in the country market."

While the "significant amount of cash" coming from City bonuses may buoy the super-prime market in the short-term, the second half of 2008 will also see a moderation in prices.

According to KF&H the role of home information packs (Hips), which became compulsory for all properties today, is also becoming clearer.

"My views on Hips have not changed: they are unnecessary, increase the costs of buying and selling homes and provide no material benefits to any aspect of the sales process.

"However, they look set to stay and as from June next year all properties will need a Hip prior to marketing. The effect of this, other than additional administration costs and hassle factor, will mean sellers putting their property on the market may be delayed for two weeks," concluded Mr Watts.