PrimeResi Quarterly No.1 - preview pages

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MARKET FORECASTS Crystal Balls A summary of prime property market forecasts for the year ahead There’s a pretty broad spread of forecasts amongst the top prime property research units, although most are agreed that 2015 will be a year of two halves, cleaved by the general election. What happens in the latter half of the year depands, thanks to the mansion tax debate, almost entirely on who comes out on top in May. <strong>PrimeResi</strong> Price Forecasts 2015 • Prime central London:+1% • Greater London: +2.8% • National: +3.4% Based on an average of 16 of the top prime residential forecasts. May’s general election is, of course, the major feature on the horizon, with a strong consensus that polling day will be the year’s pivot-point. Winkworth, taking it to extremes, is predicting a 5% drop in central London’s house prices in the run up to May, followed by a 5% increase through the second half of the year, leaving the market with no change in 12 months’ time. That 0% forecast is a popular one in the capital: Knight Frank also put it in for central London, while Hamptons’ and Savills’ respective +0.5% and -0.5% for PCL are as close as it gets without saying it. Both Savills and RICS have gone with the zero across Greater London. Because of the election – and because of one policy in particular – the range of market forecasts in prime central London is relatively extreme, from -5% to +5%. It all depends on who wins in May and whether Osborne’s SDLT reform has done enough to quash Miliband’s thirst for a mansion tax. Chestertons and Savills both thought it was too big a call to make, opting instead to issue two sets of forecasts for central London: one assuming a Conservative win (no mansion tax) and one assuming a Labour-led win (which could/would result in some kind of annual levy on £2m+ homes). Savills believes that PCL prices will 10
plummet by 5% if a mansion tax kicks in next year, while Chestertons is a little more positive, putting its weight behind a 1.5% price rise even if Labour walks a majority (+5% if a Tory triumph). Savills is still a touch pessimistic without a new high-value homes levy, though, plumping for a price drop in PCL even if the Conservatives win and dismiss all the mansion tax chat for another four years. Only Carter Jonas has joined the firm in forecasting a price drop – also of 0.5% – for prime central London in 2015. In Greater London, the Centre for Economics and Business Research (CEBR) stands alone in forecasting a reduction in house prices. Everyone else has gone positive, with CBRE going wild with a +7% forecast. Hamptons provides the voice of reason, with a conservative (small c) +1.5% across the wider capital. The average prime resi forecast for Greater London stands at a very reasonable +2.8%. It’s a similar picture nationally: The CEBR thinks prices across Britain will drop a bit (by 0.8%) while CBRE thinks they’re in for a 6% increase over the next 12 months. It all averages out at a +3.4%. Taking a longer-term view, almost everyone is on the same page: Prices are going to carry on up, but not at the same pace as we’ve seen in London over the past few years. Q 11
Page 1 and 2: 2014 NEWS REVIEW = VIEWS & OPINIONS
Page 3 and 4: Q Foreword In the three years since
Page 5 and 6: 73 OPINIONS Talking Heads Five prim
Page 7 and 8: DEVELOPMENT QUARTER London’s top
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