Price spike feared as post-election surge in transactions fails to materialise

The amount of property coming to the market in Chiswick continues to decline despite expectations that sales were being postponed until after the election.

Estate agents had been hopeful that once the period of political uncertainty had passed, particularly with regard to the possible 'mansion tax', sellers would be quick to bring properties to the market. However, there are strong indications that sales volumes have continued to be depressed having fallen by nearly 30% year on year in the first quarter.

Alastair Hilton of Winkworth says, 'Predicted massive interest in houses following the election hasn’t materialised. Instead, we are finding that there are strong buyers who are motivated, but they are careful about what houses they offer on. In general, houses that either need a complete refurbishment or that are beautifully presented are attracting the offers.'

Only 19 properties have been reported to the Land Registry as being sold in the W4 post code area since the beginning of April, thirteen of which changed hands for over £1 million. The highest price paid was for a six bedroom semi-detached house on Dukes Avenue that went for £3,550,000. The former home of artist Joseph Gandy on Grove Park Terrace was sold for £2,075,000.

Philip Pike of Faron Sutaria is urging potential vendors to take advantage of the current market conditions saying, 'As the confidence has returned to the local housing market, post-election, the level of buyers has steadily risen. The number of houses being placed on the market has also increased slightly, though not enough to keep up with the increase in demand. This is creating a seller's market, so anybody thinking of moving from Chiswick in the next year or so, may wish to considering bringing their plans forward a bit to take advantage of these local conditions.'

Christian Harper of HarperFinn does thing supply has improved since the election commenting, 'Finding a quality property to buy in Chiswick has been like looking for hen's teeth so far this year however since the election things have become easier. I believe that we are on the start of 10% increase curve for the remainder of 2015 which has encouraged sellers to sell and buyers to buy.  I say this with slight caution as the market tends to quieten as we approach summer holidays however, "Stand By for September", I think it's going to be busy!'

Alastair Hinton continues to see strength in the prices of flats which were the best performing asset type in W4 in the year to March. He said, 'Apartments are in massive demand and have been all year. We’ve seen an increase in demand for all flats and the prices that buyers will pay have certainly increased since the beginning of the year. Partly this is down to the perennial issue of not enough stock on the market in Chiswick.'

The Royal Institute of Chartered Surveyors (RICS) UK Residential Market Survey for May 2015 shows that a post-election supply bounce has failed to materialise as London sees fourth consecutive monthly fall in supply. Almost a third more London surveyors have seen supply of new homes for sale drop. As a consequence house prices appear to be on the rise again with 49% more surveyors expecting prices in the capital to rise over the next three months.

House prices in London rose again in May at a quicker pace than in April as the number of homes per surveyor remained close to historic lows according to RICS.

In the lettings market, tenant demand in London increased again in May (on a non-seasonally adjusted basis) and in the process is continuing to run ahead of supply with respondents anticipating rents will rise 2.6% over the next 12 months.

Simon Rubinsohn, RICS Chief Economist, said: “There had been some hope that the removal of political uncertainty would encourage more properties onto the market but the initial indications are that this is not proving to be the case. As a result, it is hardly surprising that prices are continuing to rise – with the reality meaning that properties are not going to become more affordable any time soon."

April data from the Land Registry shows that the annual price increase in London was 10.9% still well ahead of the rest of the country. The average price in the capital is now £474,544. For England and Wales there was an annual price increase of 5.1% which takes the average property value to £179,817 compared with the peak of £181,014 in November 2007.

The number of completed house sales in England and Wales decreased by 17% to 54,103 compared with 64,994 in February 2014. The number of properties sold in England and Wales for over £1 million decreased by 18% to 722 from 882 a year earlier. Repossessions in England and Wales decreased by 37% to 638 compared with 1,016 in February 2014. In London repossession sales fell by 45% to just 56 properties.

However, the Office for National Statistics (ONS) has produced data which contradicts this with London prices rising by just 4.3% in the year to April the lowest growth rate in two-and-a-half years and below the national average.

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February/March/April 2015 Property Sales in Chiswick

Property sales from January 2015

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Source: Land Registry

June 20, 2015