Top end of housing market turning up, says Savills

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The Independent Online

The top end of the housing market has turned up over the last two months, the upmarket estate agent Savills declared yesterday.

The company said the factors that held the market back earlier this year - such as the war in Iraq and the Sars outbreak - had gone over the summer.

Reporting interim results, Aubrey Adams, the chief executive, said: "It's normally quiet in the summer, especially in the country house market. This year though, those deals that did not go through in the spring went through in the summer."

Mr Adams said that volumes were "well down" right up to May, with a lot of sellers being advised to drop their prices by 15 to 20 per cent, but many people refused to take the cut. "We've not seen prices falling off a cliff. People just weren't willing to come down. There were no fire-sales," he said.

The typical price of houses marketed by Savills in London is £1.3m, while its flats go for about £800,000. Outside London, the estate agent typically sells houses for about £600,000. The company is also in the commercial property market and it has a facilities management business.

"We have seen a bounce, certainly an upturn in the market. People are feeling a greater degree of confidence," he said.

Mr Adams said he had detected that some of the confidence was coming from the people working in financial markets, and the more optimistic sentiment was working its way right through the housing market.

He said that the mainstream market had "never really stopped" moving forward this year, while the top end had now "firmed up", though volumes were still down in London. However, he added that there would not be a return of the boom conditions of 2002.

"Last year was a bumper market. Now we have much more balanced market. We won't be returning to the days of 20 per cent [price] growth. We're looking at 8 to 10 per cent this year."

In the new homes market, Savills said "a feature of this year's market has been the number of block sales, sometimes discounted, to both UK and overseas investors".

For the first six months to the end of June, group profits were down 8 per cent to £9.8m, while turnover was 19 per cent lower at £114.6m.