Today`s Housing Market Is The `New Normal`, Say Forecasters !!

Date Published 12 November 2012

It’s that time of the year again, already, when forecasts about next year’s housing market are fished out of the tea leaves.

We’ve already had Knight Frank’s mournful prediction of the housing market staging the longest recovery on record, with transactions creeping up just 2% next year but staying well below historic norms for the rest of the decade.

And in real terms, Knight Frank reckons, house prices won’t be back at 2007 levels until 2031 – something for our children to look forward to.

So, what are others saying?

Hamptons International predicts house prices will rise 2% in 2013 (followed by similar rises in the following two years and then a slightly larger one in 2016), all marked by a tiny rise in transaction levels.

Savills is treading a similar path, saying that today’s market, like it or not, is the new normal.

Yolande Barnes, Savills director of residential research, said: `The market conditions we called ‘normality’ ten years ago will not be resumed anytime soon.

`The structure of the housing market has changed, if not permanently then at least for the foreseeable future.

`There have been wide geographical differences in the performance of housing in the past five years, a trend we expect to continue over the next five years based on assumptions of continued constrained lending conditions and a slow economic recovery.`

Like the other agents, Savills believes London house price growth will be well ahead of the rest of the UK.

EAT predicts we’ll be seeing a lot more house price forecasts over the next month.

And they’ll all be saying much the same thing: `That’s life, but not as we knew it.`