Savills has released its forecast for the prime UK housing market for the period 2010 to 2015.
The report predicts far lower risk of significant falls in the prime market next year, with superior growth prospects over the longer term.
Looking to the past six months, Savills summarise that rapid improvement in sentiment has led to some significant growth figures, with reports of peak prices being achieved for exceptional properties.
The release of pent-up demand has fuelled a growth of 8.4 per cent in prime central London in the six months to the end of September.
It is unlikely that demand will continue at the current level. However, the return of City bonuses and the continued injection of equity from overseas will help to plug the gap, thus underpinning current values.
These two drivers are predicted to be strongest in London and the South East, but there will be a delayed ripple effect through other prime regional markets.
Consequently, the Savills forecast for both the prime central London and prime regional markets is for a correction of no more than -1.0 per cent in 2010.
Looking further ahead, prime central London price growth is expected to total around 18 per cent and 35 per cent over the next three years and five years respectively, with equivalent figures of 14 per cent and 30 per cent in the prime regional and country house markets.
Yolande Barnes, head of residential research for Savills, commented: "Our forecast definitely augurs against short-term speculation in housing towards more medium and long-term holding of high value stock. One thing that the prime housing markets prove – even in a period of volatility – is that, over the long term, any commodity in short supply will continue to outperform the average."
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prime central London price growth is expected to total around 18 per cent and 35 per cent over the next three years and five years respectively
