2010 went out like “a bit of a damp squib" Michael Hodgson reflects on 2010 and looks forward to 2011 in our Market Report....

2010 went out like a bit of a damp squib. Both the sales and lettings market saw growth throughout the year as a whole with properties increasing in value by an average of 11.5% and lettings average prices increasing by just under 16% in the year as a whole. However, both markets saw very little movement in the second six months of the year with sales only recording an increase of 1.7% and lettings 3.1%.

The main change in the sales market in the final quarter of 2010 was not in the area of values – these actually crept ahead by just over 1% but there was a very significant downturn in volumes – sales were down 42% on volumes in 2009. This is perhaps not surprising in the wake of the coalition government’s autumn budget, expenditure cuts and tax increases. As so often happens, London vendors and buyers seem to have adopted a “wait and see” policy with the number of applicants also down by nearly 8% year on year from a fairly low base.

Again, quite understandably, activity has been transferred into the lettings market where the number of lets was up by just under 7% year on year, though even in this market, the number of applicants was also down by just over 8%. The shortage of stock in the lettings market is 20% lower than it was a year ago, so lack of property generally (and rather a lot of snow!), has caused a severe slowdown at the end of the year.