Spring bounce for prime property market?

The Prime property market is expected to experience a pick-up in activity in the New Year as a surge of homes come onto the market, expanding buyer choice and promoting competition for the best properties, according to Primelocation.com.

In December alone, the prime property portal identified over 10,000 vendors that have yet to appoint an agent to market their homes, with almost a quarter of those based in the South East. This indicates that top end homeowners in this region are set to lead a bounce in activity in the Spring as they put their homes on the market.

Following a prolonged period of limited Prime stock availability, the increase in quality supply will galvanise buyers to enter the market as they compete to purchase the best properties that fit their more exclusive criteria. Some buyers are likely to be prepared to offer a premium to secure their ideal home, buoying prices and pushing transaction levels up.

Prime homeowners in southern parts of the UK will benefit the most from this new market revitalisation. After the South East, the second highest level of Prime market activity is expected in inner London, which accounts for over 14% of those looking to sell but yet to appoint an agent. Homeowners in the South West are also demonstrating a high propensity to sell and make up 11% of those looking to move.

The North of the UK and Scotland will see lower levels of activity, with only a combined 15% of people planning to move being based in the regions.

Andrew Smith, Head of Research for Primelocation.com, comments: “This barometer of the level and location of Prime market activity for coming months indicates that we are likely to experience a relatively busy Spring, fuelled by more positive consumer confidence and an improved propensity and ability to sell.

“This is particularly true of London and the South East, where top end homeowners, who may be anticipating a bonus in the New Year, are now ready to put their homes on the market following a period of more constrained supply and demand. The wider range of choice that the bolstered stock will offer will enable more buyers to find their perfect home in the Spring, driving a bounce in transaction levels for Prime family properties in particular.

“In the Prime market, buyers will not want to miss out if a home they are interested in finally comes up for sale and this will have the effect of boosting competition and buoying prices, possibly even pushing them up on bespoke properties in some of the most sought after locations. Due to the shortage of property, some agents have reported the return of the sealed bid in 2009 and this could increase into 2010.

“Once activity in the key Prime markets picks up, we can expect the other Prime city and country markets to follow, and if lending continues to improve, we could even see some more positive signs appearing in the wider UK housing market.”