Ian Maitland, editor of International Property Alerts website & ukpropertyalerts.co.uk gives his verdict on the London Market, RICs Surveys, Murky Markets & Auction Property.

London Supply & Demand

Buying central London property? Act fast as stocks are down 93 per cent on 2008 levels. James Hyman, Partner for Residential Sales at Cluttons, says, "Buyers in Central London are facing a very different market in 2011. We are seeing lots of disappointed buyers who have held off from making an offer in the hope of securing more viewings and consequently missed out on a property they liked."

"If they see a suitable property, they should act quickly to secure it rather than waiting for more choice to come on to the market. Unless homeowners have specific demographic reasons for moving, such as a new job or growing family, there is little incentive to sell currently. Central London property has proved to be the only stable investment throughout the downturn, and fewer and fewer people are willing to relinquish their interest in it."

RICS - Where Next?

I'm not a huge fan of subjective surveys but the RICS survey of chartered surveyors' opinions usually seems to call the market pretty well. Basically, they are currently saying that rents are continuing to rise rapidly as a result of a mix of short supply and rising demand. A balance of 40 per cent more surveyors reported rent increases in the three-month period to the end of January.

'The current buoyant state of the rental market is likely to persist for some time to come, given the challenges facing the sales market. It is unlikely that finance for first-time buyers will become much more readily available, while uncertainty over the economy may also deter potential homebuyers.'

Even so, and as ever, it's important to beware of 'averages' which are often inaccurate when it comes to looking more locally. RICS indicate, for example, that there are significant regional differences with rents strengthening in London and the South East but softening in parts of the South West.

Danger! Murky Markets

if you are investing overseas, you really want to be looking at a transparent market and, frankly, many of these emerging markets are far from transparent. It may sound daft, but one sign of a transparent market, and it's not the be-all and end-all of course, is whether it has some sort of independent property index in much the way that the UK has the Land Registry (and a host of others for that matter).

The problem is that many emerging markets, especially those that quote outrageous growth figures, do not have independent figures. As often as not, it's the developers and agents who are quoting figures and, in new-build locations, the developer is simply putting out puffed-up paper figures.

Brazil is one country where some of the figures, especially in the North-East area which is littered with new developments, are hard to believe. So, although it is limited, it is good to see that the Ministry of Finance and the Central Bank plan to introduce a Brazilian Property Price Index. It will, to begin with, cover the prices in five cities and, although the basis of the figures needs to be checked, it is a helpful sign.

Auctions - What's What?

Going to a property auction for the first time? Know the difference between 'guide price', market value' and 'reserve'. Each lot will usually have a guide price or, more likely, a range such as '?120,000 - ?130,000'. This figure usually refers to what the auctioneer thinks the lot will sell for at the event. A definition should be provided within the first one or two pages of the catalogue under 'Auction Notes', 'Procedures Explained' or similar. Very occasionally, the figure is their estimate of the market value of the property.

To assess the accuracy of these figures, you need to papertrade auctions for a while, monitor the auctioneer's guide prices and selling prices, get a sense of where the market is going and which auctioneers are keeping up and which are lagging behind. The vast majority of lots will go through with what's known as a 'reserve price'; i.e. the bidding must reach this sum for the lot to sell. That's true even with repossessed properties. The reserve price is not made known to the public but is sometimes close to the lower figure given in the price range.

London - The Outlook

An interesting point on the London rental market. The latest analysis from Savills suggests average rents grew by 11.5 per cent in 2010 and are expected to reach 8 per cent across prime London and 7 per cent in the prime central zones in 2011.

Savills 'Market Strength Indicator' is, as the name suggests, an indicator of future trends. Prime central London is now 11 percentage points above its four-year average and stock levels are 17 percentage points below that average.

In south-west London the indicator is at seventy nine per cent and stock levels are down 40 per cent. Who'd have thought? We are taking a closer look.

Iain Maitland

Get free weekday property news from www.ukpropertyalerts.co.uk and www.internationalpropertyalerts.co.uk