On December 6th the Halifax and Nationwide Residential Indices were showing that increases in the UK property prices were continuing to rise; in November the reported increase had been 2.1%. Yet data from Hamptons’ network of branches covering London, the South and West Country reveals that in these regions the market had started to fall from as early as May. Vendors will therefore remain confused until the residential indices are split into geographic regions across the country.

The Hamptons Group is of the opinion that prices will fall by between 5% and 10% between January and June 2003, with the market then leveling off and there being a 2% to 3% increase in the second half of the year.”

Central London (17 branches) – Marc Goldberg, Director
"We enter 2003 with property stock in London around 30% higher than at the beginning of 2002. Naturally this will increase competition between vendors to attract fewer buyers and will lead to many reducing their prices to achieve a sale.

Once vendors accept this new trading climate and they adjust their prices accordingly, buyers will realise that there is a good selection of competitively priced properties available - especially with borrowing costs likely to remain low. We therefore anticipate an increase in purchasers in the New Year.

Downward pressure on prices in the London market has been prevalent for properties over £500,000 since summer 2002 and we believe that in early 2003 this sector will be trading by as much as 10% below the highs seen 6 months earlier. Conversely, given strong demand for properties below £500,000, we believe prices in this sector will remain fairly level for the foreseeable future.

We anticipate a slow start to the year in the capital, with a degree of buoyancy and greater turnover returning in the spring and newly adjusted prices remaining level for most of the year."

London Houses (£3mln+) - Adrian Owen, Director
“There will continue to be serious buyers for London Houses in 2003 and, aware of the market conditions, most are expecting to find a bargain. Indeed many are doing so. The low stock levels of these prestige properties would normally help to keep prices inflated. We anticipate that further price corrections will still be necessary in the New Year.”

Residential Investments – Peter Woodley, Director
“I expect the London investment market to enter 2003 very much as it leaves 2002 - with caution. Rather than individual “buy to let” purchasers the market is dominated by professional investors, who are particularly knowledgeable about the new build residential market in which most of them are interested. With reduced sales of new build schemes, more advantageous terms and incentives being offered by the developers, more than ever will buyers be king, picking the best and paying what they consider to be ‘the right price’.

For the best developments in the right location and with the best specification the market will remain strong, with plenty of funds available. Factors such as time to completion, the ability to lease, and brand image will also influence the appeal of individual developments to professional investors.”


Southern Region (17 branches covering Surrey, Sussex, Hampshire, South Wiltshire) - Mark Anderson, Regional Director
“As we move into the New Year I expect to see demand in the country remain consistent, particularly for good family rural and village houses from £250,000 up to around £1 million. Whilst the top-end of the market above this level should by no means spiral into decline, it is likely that it will remain a greater challenge to achieve the sorts of premiums that we secured for vendors in the first half of 2002.

Continued price caution will prevail on the part of buyers but I believe that 2003 will see an active market, with plenty of sales as more sellers adapt to the market. The beneficiaries will be those sellers and buyers who adopt a realistic approach to price soonest, and then seize upon parties who show real commitment and are genuinely able to proceed.”

Central Region (18 branches covering Berkshire, Buckinghamshire, Oxfordshire, Gloucestershire, North Wiltshire and Bristol) - David Adams, Regional Director
“The residential market in the south and western counties is a two-tier market; properties below £250,000 behave very differently to those above that level.

I see an opposing trend to the London market in the country regions. I predict an industry-induced shortage of saleable homes between December and March 2003, which is likely to improve sales over the same period last year and also provide some good offers for vendors during this period. However, as soon as the buds appear on the hedgerows in spring, the market is likely to be flooded with homes for sale. In previous years the numbers of purchasers have also risen to meet this spring surge.

The effect on prices of a flooding of the market with new stock will depend on the supply:demand ratio – in other words how many buyers also register. We will have to see. In any event our policy will be to bring as many homes to the market early in the New Year as possible, to counter swings in the number of homes for sale.

In previous years, during the spring the motivation to "buy now" has been provided both by rising prices and the spectre of higher interest rates. In 2003 the majority of buyers may well consider that neither prices nor interest rates are likely to rise dramatically, so I think it unlikely that there will be such levels of exuberance amongst purchasers, as the motivation to "buy now" will no longer be there. This may lead to a softening of prices in the summer of 2003.”

Cotswolds & West Country - Nick Hole-Jones, Director
“Demand from London buyers diminished in the second half of 2002 and many buyers we were seeing at the end of the year were local, which has had the effect of stabilising prices in the area. However, activity is likely to start early in 2003 rather than the traditional March/April and, although prices are likely to remain static, continuing equity shortfalls should mean that residential property remains a rewarding safe-haven for cash.”

Thames Valley & Chilterns - Chris Moorhouse, Area Director
“Next year should be busy as long as people keep their prices down and don’t enter the market in January adding 5% onto their price. If prices are sensible in the New Year then we might see a marginal price increase of around 3% throughout the course of 2003, but if we start another year with inflated prices it will stagnate the market."

Surrey, Sussex, Hampshire - Christopher Neve, Area Director
“The market for well-priced houses below £1 million will be strong in the first half of 2003. Above that level it will be the exceptional properties that sell well. There are serious buyers out there and correct pricing will be the key to a successful sale.”

Country Houses (£1 million+) – John Denney, Director
“There are encouraging signs for the New Year at the top end of the market. Many vendors have been pricing their properties more realistically - indeed at the end of 2002 we saw several properties that had been on the market for up to a year selling after a price reduction. Others are still sitting on the fence and as we are unlikely to see much new stock in early 2003, demand should outweigh supply and help to keep prices relatively stable.

Continuing fear of job losses, reports of a weakening economy and ‘boom-bust’ reports in the media will contribute to uncertainty. But a ‘bust’ scenario in 2003 is unlikely. There would have to be a major crash in investor confidence or a considerable change in world events for this to happen. Bricks and mortar remain the best investment, especially while interest rates and the stock market remain low, so I have no worries about the country house market in 2003.”

New Residential Developments - Godfrey Winterson, Managing Director
“We predict buyer confidence will be fully restored by the spring, when the new homes market has been proven to be the most buoyant over the last seven years. Outside of London, prices are likely to rise between 5% and 7% across 2003.”


Residential Lettings & Management - Amos Barber, Director
"We remain optimistic about the market in 2003, although we’re holding our breath to see what happens in the run up to spring. We anticipate prices will continue to recover and perhaps even start to rise during the usual spring rush, as more and more applicants fight to secure a diminishing supply of good quality property.”

Residential Lettings, London - Bill Borrett, Director
“The lettings picture for 2003 in London is still very confused. If the sales market slows then more property will appear for letting, which in turn will hold rents at their present levels or even lower. In any event we expect to see those more flexible, tenant focused landlords continuing to achieve quicker lets with better rents.”

Asset Management - Lorraine Collis, Manager
“If we avoid military intervention in the Gulf the investment market should remain strong in 2003. Investment landlords are already beginning to assess their portfolios more closely and consolidate or renovate as appropriate. With further City job losses, certain residential areas will prove less attractive and we will see movement in this respect. This will in turn fuel a resurgence of interest in new developments and in the more traditionally secure parts of the capital.”

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