|Have Chiswick Property Values Plateaued or Peaked?|
Agents sound a note of caution as W4 house prices run out of steam
Property price rises in Chiswick appear to have lost momentum with the latest official figures showing them to be broadly unchanged for the last 9 months.
The overall average in the W4 post code area remained above £900,000 in the second quarter of 2014, according to the Land Registry, almost the same as the level seen in the previous two quarters and close to the all-time high. Compared with a year ago prices are up by 9% a slower rate of increase than has been seen in the rest of London.
One section of the market that is continuing to see price rises is flats which saw an increase of 23.4% over the last year. With the average flat now costing £523,586 prices of this type of property are at a new all-time high.
Local estate agents appear to be generally more cautious with opinion divided as to whether the market has peaked with higher interest rates and political uncertainty likely to lead to declines before the end of the year or plateaued with prices stabilising at current levels for the foreseeable future.
Alastair Hilton, Sales Manager at Winkworth said, "The last two months have seen the market in Chiswick slow down. There are still as many buyers as there have ever been, however they are being a lot more careful about what properties they are buying. No longer are they rushing in to buy anything at any price. If the price is right and the property ticks all of their requirement boxes, they will buy it. Any home that is overpriced though, will sit on the market."
Christopher Bramwell of Savills has reached similar conclusions saying, "the rate of house price growth has slowed dramatically since second quarter of 2014 as the heat came out of segments of the market that have seen the highest levels of price growth. The predominantly local domestic markets which demonstrated explosive growth in the last quarter of 2013 and continued through into early 2014, have slowed significantly since Easter 2014."
He thinks there will be resistance to further price inflation and higher stock levels. Combined with the spectre of interest rate rises, and in some parts of the market more constrained mortgage lending, this has had an impact on buyer sentiment.
Christopher added, "With an election approaching and the taxation of high value property still on the political agenda we expect values to plateau in locations that have seen the steepest price rises as buyers apply the brakes on further increases for a period. Sellers should price realistically for a market that looks to have returned to more normal conditions."
Christian Harper of OliverFinn, "A £900,000 average is on the high side of sensible in my belief and should this tip over £1million, I think we will have some bigger problems in the future, namely a sudden drop. The activity this year has been mind-blowing in terms of demand and achievement of asking prices however things have certainly changed. I believe that Mark Carney’s speech suggesting that interest rates would increase and property prices needed to cool to avoid intervention was a clever ‘hand brake’ to a market that could be likened to a child being left in a sweet shop. I hear ‘Not in Chiswick, prices never go down in Chiswick’ on a regular basis and can now factually state that prices have slightly reduced in Chiswick in the last quarter and this will be evident with Land Registry data in six months time."
He expects the market to remain more stable over the next 18 months with perhaps a 1 or 2% increase in prices rather than the heavily reported potential fall and adds, "I think that the days of 15% over asking price in sealed bids are parked for now whilst we can all enjoy a level of stability in the market."
Rudolph Diesel of Orchards of London also struck a note of caution saying, "there has been some cooling of house prices in central London in recent weeks and, whilst activity levels remain strong, the frantic levels of activity seen earlier in 2014 are subsiding.
"With summer holidays dominating many people’s agendas at the current time, it is likely to be the autumn before there is another pick-up in activity and this is likely to be at a steadier level as the effects of the mortgage market review have made the obtaining of a mortgage a more time consuming process and talk of a rise in interest rates become more pronounced.
"There does however remain a shortage of good quality housing supply and this will ensure that property values at least hold as we look to the future."
There is more optimism amongst agents about the rental side of the market. Christopher Bramwell of Savills says, "the lettings market locally is witnessing very strong demand and our lettings department have had two consecutive strongest months, the demand from tenants is at an all time high reflecting the slight return to normality on the sale market.
The average price in London during the month of June was £437,608 which is up by 16.4% compared with the same month in 2013. For England and Wales as a whole the average is now £172,011 compared with the peak of £181,466 in November 2007 up by 6.4%.
The most up-to-date figures available show that during April 2014 the number of completed house sales in England & Wales increased by 31 per cent to 66,659 compared with 51,022 in April 2013.
The number of properties sold in England and Wales for over £1 million in April 2014 increased by 39 per cent to 1,028 from 740 in April 2013.
Roughly speaking the post code sector areas are as follows:
1 - Bedford Park and the north side of the High Road
2 - The south side of the eastern end of the High Rd down to the river at Corney Reach
3 - The Grove Park area and over to Strand on the Green
4 - The west of Chiswick between the A4 and Chiswick High Rd - (a high concentration of flats)
5 - The north west of Chiswick - Acton Green mainly
August 15, 2014