Housing market "in early stages of recovery" - Savills

4th Aug 2009

The housing market is now in the early stages of a recovery that will be led by the prime market, according to a new report from Savills.

In Residential Property Focus, head of Savills residential research Yolande Barnes stated that the imbalance between demand and supply that the housing market was experiencing “makes a recovery inevitable.”

Another indicator was a restored confidence in bricks and mortar, triggering price rises over the last few months, with prime central London seeing a price increase of 4.3% between March and June.

Savills said it expected prime markets to lead the recovery as they were less susceptible to restricted mortgage lending and unemployment. But prices rises seen in the mainstream market since the start of the year were “premature” and unemployment and tight lending were likely to lead to further price falls, “interspersed with short periods of price growth that may occur over a longer period than for prime property.”

The estate agent added that it anticipated more properties coming to market in the autumn which could disrupt the delicate supply-demand balance to favour buyers. “In this case, new stock for sale will take some heat out of the market,” Savills said.