CLOUDS are gathering over the UK property market, according to the estate agent Savills, but the ensuing storm should be shortlived. The agent predicts a turbulent half-year ahead, with prime Central London property to suffer falls of 3 per cent and the rest of the country stagnating.
But the difficulties, caused by the credit squeeze and worries about bonus sizes, will be swiftly followed by a return to growth. Across the market, prices across the UK will be up 3 per cent by the end of the year, with London, the South East and Scotland outperforming.
The North, Yorkshire, Wales and the Midlands will underperform, according to the Savills weather map, pictured right.
This turbulence will affect the enthusiasm of both buyers and sellers and turnover will drop significantly. Some may be cheered by an interest-rate cut – Savills expects one next year, but says that, in the current economic environment, it will be 2010 before the base rate again drops to 5 per cent.