HURFORD SALVI CARR FORECASTS FOR 2011

In the second half of 2010 the Midtown, City and Docklands residential markets were strongly influenced by external political and economic factors. The May 2010 General Election and subsequent provisions of the Emergency Budget and the Comprehensive Spending Review dented confidence in the housing market. The austerity package will have a significant impact on economic conditions over the next four years, but particularly in 2011 due to the front-loading of public sector cuts. The international outlook, especially in the eurozone, is uncertain.

Recent growth in the sales market had been dependent on equity-driven overseas investors and UK cash-buyers, but by the end of the year there was a general lack of confidence, with lower transaction levels and reduced prices. The rental market, however, was buoyed by the relatively healthy central London employment market, barriers to owner-occupancy and a general shortage of rental stock. The trends for both the sales and rental markets established in the
second half of 2010, we expect to see continue in 2011 against the background of an economy characterised by low interest rates and low growth.

The London 2012 Olympic Games will have an increasing influence on the residential property london market in 2011 and 2012. Midtown, City and Docklands have excellent access to the Stratford Olympics site and will benefit from the positive publicity generated in the lead-up to the Games. In the meantime, 2011 will also see the opening of Westfield’s 1.9 million sq ft Stratford City shopping centre which has secured Marks & Spencer, John Lewis and Waitrose as anchor
tenants. This development will have a significant positive impact on residential markets within its extensive catchment.