|Prices Up, Prices Down?|
We speak to local property experts to clear up index confusion
Property watchers would be forgiven for being confused following the publication of conflicting recent house price indexes.
Home sellers raised asking prices for a third month in a row as a shortage of properties for sale helped support values according to Rightmove Plc.
Nationwide agreed with this stating house prices increased by 0.3% in February. Commenting on the figures, Robert Gardner, Nationwide's Chief Economist, said: “House prices increased by 0.3% month-on-month in February, leaving prices 0.1% lower than the same month a year ago. The overall picture is still one of a market treading water. Indeed, the three month on three month measure of house prices, a better measure of the underlying trend, was basically flat in February at -0.1%.
“This shouldn’t come as too much of a surprise. Housing market trends are closely linked to wider economic prospects. Given that the recovery hit a soft patch at the turn of the year and looks set to remain sluggish in the year ahead, the property market is likely to follow suit, with relatively low transaction levels and prices moving sideways or modestly lower through 2011.
Halifax Price Index however claimed that house prices fell last month and that economic uncertainty may weigh on demand.
To clear up uncertainty, we asked local experts their opinion on the issue.
"It is so easy to follow statistics and base market values on a single 'headline' article produced by an economist who is not only protecting their own firm’s interests but also reporting on national figures," said OliverFinn's Christian Harper. "On a more local level we also need to inject emotion into the calculations combined with annual 'check point' trends including school terms, bonus payments and holidays. I like to think of every instruction as its own market to maximise its potential and tend to draw clients away from general summaries."
Andrew Nunn of Andrew Nunn & Associates said: "We are seeing the emergence of a tiered market where prices for prime property remains robust with plenty of demand and multiple offers at asking price and above being achieved, however secondary and tertiary property is a lot more price sensitive and requires an in depth knowledge of the local market in order to price correctly. School catchments areas, crime rate statistics, proximity to transport, different borough boundaries, short leases, absentee freeholders, excessive service charges etc will all play a part in correct pricing. Buyers for this type of property are cautious and all of this information is in the public domain so they will only buy homes that either totally suit there lifestyle requirements or do not come with hidden problems.
"With the ongoing erosion of confidence to due the national economic climate and negative world events buyers are only paying top money for prime stock. It is critical for potential sellers to take balanced advice before marketing their homes as the old saying "start too high...sell below market price" will become a feature of the Chiswick market"
Andrew Dunford Director Winkworth of Chiswick said: "The trouble with house price indices is that they are far too general. Chiswickians might not know that Nationwide accounts for only three per cent of lending through mortgages; Halifax also represents a relatively small niche; these days there are no market leaders - so no index from any of the lenders can possibly be representative or relevant throughout the UK.
"Besides which, and I know it's a cliché, this is Chiswick. Though none of us should be complacent, Chiswick's desirability - thanks to its high quality local shops, the closeness of the river, good schools, lovely gardens and greens for walking the dog, leafy streets, so many places to eat and drink, and fantastic road, rail, tube and bus links - means it usually bucks downward trends or, at least, is significantly less affected by them.
"The only index that is relevant here is the Chiswick index - and, judging by our long-standing experience locally, demand from people outside Chiswick wanting to move in, and so many people who live here wanting to move within it, keeps prices buoyant. At the moment, demand is outstripping supply in terms of buying and selling and we hope that people contemplating moving will have the confidence to do so, especially now it is spring, traditionally the time most people put their properties on the market. And if Chiswick residents want to increase their property portfolio by investing in flats or houses to let, we can reassure them that there are more tenants wanting to rent in Chiswick than Chiswick has space for.
"Ignore the big name indices. Trust your local estate agents!"
March 24, 2011