Housing supply shortage set to continue into 2010

Active buyers are still looking for value – houses that were deemed overpriced earlier in the year sold under competition when prices were brought down to realistic levels in the autumn market.

Buyers need to be prepared to act quickly – prices are unlikely to soften in the spring market and the ongoing lack of supply means that the majority of good houses are selling under competition and gazumping is back.
 
Mark Lawson, Partner and head of high value houses and landed estates, said: "The land and estate market has seen a very healthy end to the year, for example, the sale of Malverleys, Nr Newbury, which achieved in excess of its £12million guide price with four people bidding – a figure that reflects peak market prices.

"One of the most noteworthy recent land deals is Manor Farm, Turkdean, Gloucs, (466 acres) which is under offer for significantly above its £5.5million guide price, with two UK buyers bidding. International buyers continue to dominate the market over £5million, and we are beginning to see Russians moving further out of London. There are also rumours of the first active Chinese buyer in the Home Counties with more than £10million to spend.

"In my view, the top end of the country house market (£8million +) will continue to be short of supply in 2010, however I believe that there will be an increasing number of properties available privately – perhaps as much as 75% compared to 25% on-market, but vendors will want premium prices. The best in class will attract competition and will continue to sell well with peak market figures being achieved. This is as a result not only of the supply shortage and weak pound, but the ability to borrow cheaply for those able to access the banks’ funds – a luxury for the rich and super rich.

"I believe the Home Counties will continue to be extremely sought-after (due to predicted city bonuses and international buyers), but also the core strong areas in the country including Oxfordshire, due to access to London and schooling, Gloucestershire, due to the beauty of the countryside and the pretty houses, Dorset, because of the shortage of supply of property over £3million, and Hampshire because of commutability, good quality housing stock and the existing wealthy community.

"The supply of farm land will continue to dwindle, pushing prices ever higher, again driven by shortage of supply (because farmers are not having to sell as they can afford to fund their borrowings, and with the weakness of the pound, their Single Farm Payment cheque from the Euro Zone has increased in value by as much as 25%). Demand will be stronger than ever because it is now firmly believed that, with the growing population and the continued likely shortage of food, the Landowner will once again become king."

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