News: Caution over weakening property market

FDP Savills has seen ‘buoyant’ residential property markets in the first half of the year and now has an order book that remains stronger than last year.

However the property adviser cautioned that residential markets might not be as buoyant in the second half.

The caution came in the half-year trading update, which said that investment markets remained strong and the group was expected to "deliver full year results in line with our existing expectations".

"The first half has seen strong investment markets especially in the UK and in key European markets and this should ensure that commercial activity levels remain high in 2006," it said in the statement.

The commercial property investment market throughout the UK remained strong and the first half saw a continuing high level of transaction volumes. There is continued high demand for property from private and institutional buyers both in the UK and overseas.

Tenant demand in both London and the regional commercial markets is improving.

"Residential markets have been particularly buoyant in London and had a much stronger first half than was the case in 2005, although we do not expect this trend to continue into the second half," Savills said.

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