A healthy but cautious property market

Kinleigh Folkard & Hayward reviews the property market in London for the first month of 2007.

Lee Watts, Managing Director of Kinleigh Folkard & Hayward, comments: “We are continuing to see high levels of demand in the London residential property market with new buyer registrations showing a significant increase compared with January 2006. At the same time we have seen an even sharper rise in the level of property valuations which indicates that we should see an increasing supply of property coming to the market during the coming weeks.

“Despite this activity, we have seen an air of caution as a result of January’s surprise increase in interest rates and the significantly reduced property stocks brought into the New Year. The number of sales for the first four weeks of the year was down compared with 2006.

“Today’s decision by the Bank of England’s Monetary Policy Committee to maintain rates at 5.25 per cent is news which will be welcomed by the property sector.

“With the anticipated increasing supply of new properties to the market in the coming weeks, this should provide a more balanced market which is good news for both buyers and sellers.

“Within the London market, I anticipate that the number of sales will steadily increase over the coming weeks, with year end transactions being very similar to 2006, and with price increases for the year still averaging between 7% and 8% across the capital.”