2006: Busiest property market since the 1980s

Lee Watts, Managing Director of Kinleigh Folkard & Hayward, reviews the 2006 market and looks forward to 2007.

2006 Review: 10-15% price increases. Demand 30% higher than 2005:
“2006 has been the busiest year we have witnessed in the London property market since the late ‘80s with almost all areas seeing price increases of 10 to 15 per cent. Demand for quality homes has been consistently solid all year and is still some 30 per cent higher than in 2005.

“This current level of demand cannot be satisfied by the relatively low levels of properties available for sale and this will undoubtedly lead to a continuing strong market in 2007. And, as a result of this relatively short supply of stock, buyers are looking at the long term view and are prepared to pay premium prices of the home of their dreams.

2007 Market: 10% rises in first six months:
“I anticipate that during the first half of 2007 we will see a further sharp rise in property prices of at least 10 per cent. However, I expect this to stabilise during the summer and latter months bringing overall price increases to six or seven per cent for the year.

Interest rates: minimal increases no material effect:
“Although a further quarter point increase to interest rates early in 2007 will create caution, I do not believe this would have any material effect to demand in the London market place.

HIPs: could create ‘hiccup’:
“The introduction of Home Information Packs could still create a ‘hiccup’ in the property market next year. However I hope that the government takes the appropriate medicine and realises that this ill conceived, ill designed and ill delivered package is not the answer to improving the home buying process.

Regulation of estate agents: fully support:
“As announced in the Queen’s Speech, it is likely that all estate agents will be legally required to join a regulatory body in 2007. We fully support and welcome this legislation. I only hope that this will be a professional and qualified body, empowered to deal with the bad practices adopted by some operations within our industry.”