|Chiswick Property Market Braces For Impact of Higher Interest Rates|
Outlook seen to be gloomy until 'Brexit dust has settled'
Chiswick's estate agents appear divided as to whether the first rise in interest rates in the UK is a good or bad thing for the moribund local property market.
The increase came just as the latest sales figures on the W4 post code area were released showing little revival from the historically low level of activity seen over the previous year.
Just 92 Chiswick properties have been reported as sold to the Land Registry in the third quarter of 2017 at an average price of £948,780 which is down by 5.7% from the same period last year.
The data indicates that turnover levels have made a small recovery as, although they are down on the same three months in 2016, more sales are likely to be reported for the period. Prices seem to be stuck in a holding pattern with the overall average oscillating above and below the million pound mark for nearly two years.
Christian Harper of Harper Finn said, "Whilst these latest figures suggest that the volume of sales improved, we must remember that these figures reflect the time of the year that historically is ‘the season’ when the majority of people move within the annual cycle. I think it's fair to say that the transaction levels, number of instructions and prices actually achieved by Chiswickians is fairly gloomy and some suggest that selling homes in Chiswick will continue to drag along the bottom until 2021. Well after the Brexit dust has settled."
Despite the general lack of activity there does seem to be continuing interest in certain types of property with sales of large family houses still going through. There were a number of homes changing hands for over £2million including a six bed semi in Netheravon Road which went for £3,285,000.
Christian added, "It's so easy to be doom and gloom however let's try to focus on the positive rather than the current obvious. People still want to move to Chiswick and people still need to live in houses. Whilst governments keep falling over each other with bureaucracy and don't build enough new houses in London, demand will continue to exceed supply. Although this is an avoidable disaster for the next generation, in the medium to long term, prices will continue to rise. It's only a matter of getting the timing right for you."
In the immediate future the impact of higher interest rates has yet to be felt. There is a view held by some local agents that buyers might want to move as quickly as possible to lock in fixed rates that remain low which means that Christian is not ruling out a mini-boom in the early part of 2018.
He says, "the first quarter of 2018 might be the best of next year. If a move is on the cards for 2018, start obtaining opinions from independent local agents this year. None of us will be able to give you the pricing for 2018 but at least you will be able to pick the individual that you want to sell your home well in advance and get ahead of your competition. It will remain buyers' market so please consider that you will have competition when you try to sell, something that none of us as sellers are used to in Chiswick."
According to the Nationwide House Price Index prices in London were down for the first time in eight years in September. It was the weakest performing region in the country with prices down by 0.6% year on year. Overall prices in the UK were up by 2.0% over the same period.
Robert Gardner, Nationwide's Chief Economist, said, “The annual rate of house price growth remained broadly stable in September at 2.0%, compared with 2.1% in August. Housing market activity, as measured by the number of housing transactions and mortgage approvals, has strengthened a little in recent months, though remains relatively subdued by historic standards.
“Low mortgage rates and healthy rates of employment growth are providing some support for demand, but this is being partly offset by pressure on household incomes, which appear to be weighing on confidence. The lack of homes on the market is providing ongoing support to prices.”
The direction of price movement is confirmed by the Royal Institution of Chartered Surveyors (RICS) which is also saying that prices are declining in London.
The latest report from the RICS report on says that the number of buyers and sellers is falling and sees the short-term outlook for prices as continuing to be poor. Most surveyors are predicting lower prices over the next three months.
They also believe the rise in base rates this month will also depress the market with around four million mortgage seeing a rise in interest rates as a result of the Bank of England's decision to increase rates by 0.25% to 0.5%.
Simon Rubinsohn, RICS' chief economist said, "The combination of the increased cost of moving, a lack of fresh stock coming to the market, uncertainly over the political climate and now an interest rate hike appears to be taking its toll on activity in the housing market.
"A stagnant second-hand market is bad news for the wider economy, not just in terms of spending, but also because it restricts mobility."
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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