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News Release

London

Slow down in UK housing market activity continues; two tier market evident

According to Jones Lang LaSalle’s latest UK Residential Market Forecast


London, 17th November 2010- According to Jones Lang LaSalle’s latest Residential Market Forecast, residential price growth continued to weaken throughout the second half of 2010 with a national forecast of a flat housing market predicted by the end of the year.  A two-tier market is also evident which splits price performance in London from the rest of the UK.
 
James Thomas, head of Residential Investment and Development at Jones Lang LaSalle, said: “UK prices are up 1.4% annually, although in light of public spending cuts, prices fell back 1.5% in Quarter 3 and, as the brunt of these cuts are phased in, average UK house price growth has been revised down from 0 to -1% in 2011.”
 
James continued: “In contrast to much of the UK, price growth in London has continued.  When measured on a quarterly basis, Greater London rose 1.1% in Quarter 3 and Southern areas of England gained 0.8% while the Midlands and Northern market were flat.  We expect this north/south divide will widen next year as public spending cuts and a reduced welfare spend affect take-home income.”
 
Jones Lang LaSalle’s Forecast highlights that for the first time in nine months the supply of property for sale declined, nationally demand remained suppressed with the net balance of new vendor instructions falling from +22% in September to -4% in October on the RICS measure.  Over the same time frame new buyer enquiries fell from -2% to -12%; the fifth consecutive month of falling demand.
 
Government policy continues to have a significant bearing on the housing market: with the Comprehensive Spending Review, Localism Bill and National Planning Framework in April 2012 all set to have an impact. Regionally, Local Authorities will be able to benefit from the government’s New Homes Bonus scheme, designed stimulate house building at a local level.
 
Rob Bruce, head of Jones Lang LaSalle’s Residential Research, added: “Short-term turmoil sees UK price growth estimates revised down, after new government policy measures are embedded the longer-term outlook for stable price growth is encouraging.  National prices are forecast to rise by an average of circa 7% per annum from 2012-14. The regional differential is however projected to widen with strong growth in London above 9% per annum”.
 
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Notes to Editors:
 
• In order to track house price movements and identify trends, Jones Lang LaSalle has launched a new London mapping tool in association with The Digital Property Group (TDPG).  The map tracks sale and rental prices alongside gross investment yields at a granular level across circa 14,000 properties, over a potential 119 London postcode sectors.  Pricing is broken down by the square footage of the property, allowing a like-for-like comparison by area.  For more information on its findings please contact Rob Bruce - Rob.bruce@eu.jll.com