According to this, we are witnessing a once-in-several-lifetimes event.
Frontrow seat. http://www.wolseysecurities.co.uk/news.php?id=566
Latest take from our friendly estate agent says even they don't expect full recovery until 2012, somethings you can't deny, but you can still dress it up http://www.savills.co.uk/news.aspx?id=9936
19 August 2008
The End Of The Tunnel Is Nearer In The South
The number of transactions in the housing market is half last year's levels and the number of housing starts is likely to fall even further. Supply could therefore become constrained in many markets over the coming months. This means that when the market does bottom out, it may be difficult for investors to make acquisitions. For anyone looking to invest, knowing which regions of the country are likely to recover first and fastest is essential to avoid being timed out by a rising market.
Savills Research has forecast not only the duration and size of the market downturn but also the shape and timing of recovery. Their recovery map forecasts the year in which values will have returned to 2007 levels by UK Government region. It also shows the size of the subsequent house price growth that might be expected by 2020 by recording falls and subsequent rises.
Savills recovery map suggests that London and the South-East will lead the recovery and will quickly return to former levels, by 2012 whilst, in the North-East and Northern Ireland for example, any upturn will occur later and full recovery is unlikely until 2016.
Yolande Barnes, head of Savills residential research explains, "This property market downturn has affected virtually all property sectors and UK regions simultaneously but regions will vary far more when the upturn comes.
"The lack of turnover and new supply which is such a feature of this downturn will be likely to lead to sharp increases in value in high-demand, low supply areas. Competition amongst homeowners will once again lead to rising prices, particularly in those areas with higher levels of housing market equity and stronger household purchasing power such as London, the South East and Scotland".
Key findings include:
London and the South East will lead the recovery so that, by 2012, values will have recovered to those pre-slump.
Between 2008 and 2020 average growth in the South East will be +79%.
Scotland will also have recovered by 2012 with growth between 2008 and 2020 averaging +47%.
On the downside, Northern Ireland and the North East are forecast not to have recovered until 2016 with average growth between 2008 and 2020 of +33% and +19% respectively.
Barnes again, "This downturn is severe and will almost certainly last for at least another year. But it is has been caused by the withdrawal of credit, not the withdrawal of long-term demand or by diminished purchasing power amongst owner occupiers. It is this that will shape the recovery when it comes. Although the credit crisis has affected all sectors and regions more or less equally and simultaneously, we will see a very different pattern in the recovery. Canny investors will take this into account now".