Hamptons International’s monthly assessment of the sales and lettings property markets reports a swing in the market they think will spread further by Christmas.

Although the wider market is suffering from an over-supply of properties, this is not the case for Hamptons and the primarily southern areas in which they operate. The firm says it is seeing the combined impact of lower instructions (-12%) and a pick up in the number of new applicants (11%), compared with last year.

This pick up in new buyers is also noted by the Royal Institute of Chartered Surveyors (RICS), which reports an increase in new buyer enquiries for two consecutive months.

Interest rate

The widely foreseen quarter point cut in early August, shortly after the terrorist attacks on London’s transport infrastructure, does little to assist further predictions other than to demonstrate that the case for further adjustments in either direction is finely balanced, said Hamptons. Tellingly, for the first time, the Governor of Bank of England’s MPC voted with minority, opposing the rate cut.

Future MPC interest rate decisions will have to balance energy-price-driven inflation figures with weak manufacturing and subdued growth figures. (One of the effects of Gordon Brown’s move from the RPIX to CPI index is that the new index excludes the cost of housing, and magnifies the effect of energy prices). While the future direction is uncertain, it seems unlikely that the magnitude will be great, argues the Hamptons report.

London leads, the country follows

Mark Anderson, CEO Hamptons International Residential Agency said, "The most striking aspect of this month’s Hamptons property data is the contrast between a weaker national picture and a stronger Southern England picture, with a particularly robust London. Our experience is that where London leads, the country follows and if this cycle continues, those country areas not yet experiencing this swing will do so by Christmas."