Midlands & Heart of England

What’s in store for 2012? – The year of the great divide.  Core?  Cor Blimey!

There seems little doubt that 2012 will be a challenging and potentially irrational property market. With confidence badly shaken by recent economic news and ongoing Euro crises, coupled with pressure on household finances and job security concerns, it is no wonder buyers and seller are nervous and trading stifled.  Traditionally the property market cycle has been seasonally led, but it has become and will continue to be determined more directly by economic peaks and troughs. 

Despite headlines fuelled by reports on escalating economic crises which are de-stabilising the whole economy, the UK property market historically has proved time and again that it has a strong propensity to bounce back: there will always be an underlying demand to trade in property as people outgrow their homes and need to upsize or downsize, or move with their jobs.  Mark Wiggin of National Agent Strutt & Parker’s Shrewsbury office comments: ‘We will see less of the “ambivalent seller” (last year 30% of the market was made up of these sellers) who is likely to disappear but an increase in those that actually have to sell.’ Wiggin predicts transaction numbers for the majority of Strutt & Parker’s clients – i.e. equity-rich home owners – will be similar to 2011 but that further price falls are inevitable as the great divide widens (overall estimating down by around 4.5% but more in some areas) until the market finally finds its level. 

Indeed, 2012 will be the year of the great divide:

• North/south;
• London/the country
• Blue-chip/non blue-chip

The latter, especially, at the top end of the market Wiggin describes as ‘Core’ (prime properties) or ‘Cor Blimey’ (non-prime properties that suffer blight).

The London market will also be split, with international buyers looking likely to dominate. The usual flow of families radiating out to the home counties and beyond from London looks set to stall as depleted confidence gnaws away at those looking to leave the safety of London to start a new life in the country.  Meanwhile the country market which has seen price falls of 10% during quarter 2 and 3, anticipates further falls (particularly in the North and midlands)

2012 will be a challenging market:

• Be prepared for the irrational buyer and seller and for sales falling through
• The market will be confidence-driven; easily spooked by economic uncertainty
• Transaction levels will be similar to 2011
• Ambivalent sellers will flee the market, but there will be more “Have to” sellers
• The trend for renting (lack of mortgage funding and job uncertainty) will grow.

There remains a market for realistically priced houses and especially for farms and land. There are keen buyers out there who will buy when the deal looks right, but they are cautious: there is uncertainty for 2012 on the global plain and those who can afford to buy at the moment are also savvy, they read the economy carefully and share this view of 2012.

So for 2012 – the message from Wiggin is:

• Vendors: get in tune with reality and don’t allow your house to languish outside the market level.
• Agents: get in tune too and stop over-valuing properties in the hope of a one-off buyer to pay an over-inflated price.
• Buyers: choose carefully and wisely – there is little stock to choose from, but don’t expect there to be much more next year
• The exception: the ‘one-off’ trophy house, be it big or small, which ticks all the boxes will sell.

For more information, please contact

Mark Wiggin                                                                          Kate Oliver

Shrewsbury Office                                                               Press Office

Strutt & Parker                                                                      Strutt & Parker

Telephone: 01743 284200                                                    Telephone: 020 7318 4652

mark.wiggin@struttandparker.com                            kate.oliver@struttandparker.com

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GET DOUBLE FOR YOUR MONEY IN THE NORTH

A recent study has revealed that the typical house price in the south of England is now double that of a property in the north.

The average asking price in the north now stands at £166,347 compared with £336,743 in the south of the country. Despite the downbeat economic forecast, asking prices across London, the south and East Anglia have remained resilient, while prices in the north and the Midlands have dropped.

The divide between the regions is now thought to be at its widest ever with vendors in the north reducing prices by 2.6% in the last year, whereas their southern counterparts increased values by 3.9%.

Regardless of falling prices, sales have remained steady in the northern regions which boast five of the top ten best performing areas in terms of sales this year.

Mark Wiggin at Strutt & Parker’s Shrewsbury office commented “The north-south gap in house prices is exacerbated by the London market in particular still achieving elevated prices despite economic uncertainties. In the northern regions, lower prices disguise a steady housing market, where affordability is attracting buyers.”

Recent figures from the Royal Institution of Chartered Surveyors support these views. They found that London is almost a market apart, with a far greater degree of house price buoyancy than anywhere in the UK, an average house price of £450,210 and an influx of foreign investment. 

Wiggin added “Buyers see this as an ideal time to invest in properties in the north. The size to price ratio on properties in the northern regions appeals to families looking for a better work-life balance, or those who simply want more for their money.”

-Ends-

For more information, please contact

Mark Wiggin                                                                         Kate Oliver

Shrewsbury Office                                                             Press Office

Strutt & Parker                                                                    Strutt & Parker

Telephone: 01743 284200                                                Telephone: 020 7318 5194

mark.wiggin@struttandparker.com                         kate.oliver@struttandparker.com

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FOR IMMEDIATE RELEASE

ANALYSTS PREDICT GLOOM, BUT HOUSING MARKET MARCHES ON

In the past week various reports indicated the UK was lowest in terms of global confidence, financial directors were preparing for a second recession while companies had postponed or cancelled £4.7 billion of spending. On top of this, Sir Mervyn King, the Governor of the Bank of England, called the current financial crisis “the most serious… since the 1930s, if ever”, so it’s not surprising that those wishing to enter into the property market are being more cautious than usual.

King’s declaration that the financial crisis is the worst ever – even beating the 1930s post-war depression is an exaggerative attempt at justifying the bank’s quantitative easing measures. However the repercussions of his statement could have a negative effect on homeowners’ confidence.

Despite the woeful prophecies in the financial markets, the average UK house price rose by 0.2% last month, indicating that there is an active housing market which has not been too heavily affected.

Mark Wiggin at Strutt & Parker’s Shrewsbury office believes “Analysts have great influence in the media and need to be wary of the knock-on effects of their pessimistic statements. In a delicate economy, gloomy projections can compound fears across all sectors and discourage people wishing to buy or sell their homes.  That said, we are finding that hard work, innovative thinking and, above all, correct pricing is key to the property market in difficult times; we have new, active viewers keen to buy, but their confidence is fragile.”

Wiggin added: “We all agree that we have to tighten our belts, but unhelpful forecasters who seem to be competing for who can give the darkest prediction should be aware of the effects of their pessimism on confidence. The former can eventually dictate the latter – creating a self-perpetuating circle of doubt, which could significantly slow down the housing market”.  

-Ends-

For more information, please contact

Mark Wiggin                                                                         Kate Oliver

Shrewsbury Office                                                             Press Office

Strutt & Parker                                                                    Strutt & Parker

Telephone: 01743 284200                                                Telephone: 020 7318 5194

mark.wiggin@struttandparker.com                         kate.oliver@struttandparker.com

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