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Property predictions for 2009

Catherine Deshayes

What will the next year bring? London estate agent Kinleigh Folkard & Hayward gives predictions for the 2009 residential sales market and assess the year to date...

In 2007, the Land Registry reported a total of 1.2 million sales transactions in the UK. In 2008, KFH believe that this figure will be halved.

The current market conditions have been brought about by too much money being irresponsibly available over recent years, leading to property prices overheating.

This has now been compounded by insufficient money being available, combined with a widespread lack of confidence in the Government and financial institutions.

Based on our experience across the London market place, property selling prices today are in excess of 20 per cent less than at their peak in the spring/early summer of 2007.

Some institutions and commentators have announced falls of between nine and 12 per cent, but based on London alone, these figures are wildly inaccurate.

To illustrate, our exchange results for September 2008 reflect that average selling prices in London were over 14 per cent less than asking prices, and asking prices have already come down by 10 per cent over the last year.

KFH believe property values will reduce by a further four to five per cent and we will see this adjustment achieved by early 2009, with very little further movement in values during the remainder of that year and through 2010.

People will always need to move, and as we progress into 2009, KFH predict a change in the supply: demand ratio for property, and albeit slowly, with increasing levels of activity and transactions as the year progresses.

In 2009, a 15 per cent increase in UK sales transactions is likely, compared with 2008. Based on my forecast that there will be 600,000 sales transactions in 2008, this reflects a total of 690,000 transactions in 2009 - still 44 per cent less than in 2007."

Source: KFH