City bonuses to maintain prime market?

Ramesh Sharma

February 11, 2006

With the Royal Institution of Chartered Surveyors (RICS) the latest body to attribute sustained growth within the housing market to business being done near the top of the property ladder, it is hoped City bonuses due in the next few weeks will maintain this momentum.

Melanie Bien, associate director at Savills, said: “City bonuses are key and in the last six weeks we have seen a noticeable growth in business in properties in and above the £350,000 bracket. We are predicting a 5 per cent growth this year in the prime end of the market, which is due a lift after a couple of slower years, and this growth will drive the rest of the market.”

Brokers are currently in agreement that there is a shortage of housing in the top end of the market and it is this demand which has driven prices up in recent months.

However, Jonathan Cornell, technical director at Hamptons International Mortgages, believes supply will soon catch up and peg prices back.

“Much of the current growth in prices is down to not enough houses being on the market to meet demand. However, I don’t think this can carry on forever; maybe the next two or three months. Soon, people will start to notice the high prices and think about putting their home on the market so, as the number of properties on the market goes up, prices will come down.”

But Bien said: “Wherever there is a shortage of property, people are prepared to fight it out for good quality housing so I can see prices continuing to grow in the next few months.”

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