Chiswick Home Sale Slump Temporary Say Agents
Optimism fuelled by improved outlook for interest rates
December 10, 2023
The latest official figures show that turnover levels for Chiswick property have fallen back to levels last seen during the pandemic.
The data from the Land Registry for the third quarter of this year, the three months from July to September, suggests that the number of transactions in the W4 postcode area is down by about a third.
The fall is blamed on the effect of a series of interest rate rises and general economic uncertainty and there was an accompanying drop in the average price in the Chiswick area which was £1,121,027, down 8% compared with the same period last year.
There continued to be relatively brisk activity at the top end of the market with four houses selling for over £3,000,000 during the three months. The highest price paid was £3,510,000 for a six-bedroom terraced house on Esmond Road in Bedford Park. This property had last changed hands in June 2000 for £1,257,353. Other £3 million plus sales took place in Netheravon Road, St. Mary’s Grove and Burlington Gardens.
Despite the dismal picture painted by the numbers, locally based agents generally remain upbeat on the market for 2024 due to the fact that in the interim there has been more encouraging news on interest rates.
Christian Harper of Harpers of Chiswick said, “From our own experience Q3 was a very positive quarter. Despite widespread reporting that the prime London market would suffer, if anything it contradicted the findings of many experts and swung more to a sellers’ market. Earlier quarters in 2023 seemed to favour buyers as interest rates rose and some economists predicted the end of ’the good old days’.
“As the figures demonstrate, number of transactions are still lower than historical which may fuel my prediction for Q1 2024. Personally, I think that prices will begin to rise in early 2024. Wise money will start buying as early as January as banks continue to offer better and better long-term fixed rates. With limited amounts of property to buy I predict that multiple sealed bids could well be back with a vengeance by March 2024 as multiple buyers lock their sights on a small number of opportunities. This rise would only be softened if a greater number of Chiswick sellers decide that 2024 is the year to relocate or upsize and take advantage of the much better fixed rate mortgage deals currently available.”
Andrew Nunn of Andrew Nunn & Associates commented, “When reviewing this data, it is important to note that the Q3 transactions documented by Land Registry predominantly consisted of sales agreed in the spring months – April, May and June. Following nine months of aggressive interest rate rises, from 1% in June of 2022 to 4% in March of 2023 with mortgage rates following in their wake, it is no surprise that sales have slowed; however, the 54% year-on-year drop is expected to decrease once all sales within this period have been documented. We would expect this number to be closer to 30%. Given a large proportion of Chiswick buyers are also Chiswick sellers it comes as no surprise that our own data reveals a drop in new instructions coming to market of 25%, year on year.
“Taken at face value, the volumes reported in Q3 will be concerning (for agents!) and the fall off in turnover quite dramatic, given the overall number of sales suggested are also lower than during 2020 lockdown. However, there is a positive out there in terms of values. The sample size is small enough to distort an important reality – that in certain cases, for well-located and well-presented properties record sales prices ‘in the road’ have been achieved in 2023. This is due to the scarcity of supply and is a trend that is likely to continue irrespective of the economic and political conditions set to prevail in 2024.
“Our advice at Andrew Nunn & Associates is if you are considering a move in 2024 then take advice soon as there are some serious buyers struggling to find their next home and who will be keen to tie something down early in the new year and in the meantime we wish all Chiswickians a very Happy Christmas and prosperous New Year”
An agent working in the local office of a large chain added, “A lot of potential buyers have held off expecting an interest rate shock to provide some bargains, but this never really materialised. The market has been well supported by yields and rents actually went up in the area as overstretched landlords looked to cover their rising interest costs. The situation we have now is that for flats in the area, there has been very little rise in capital value for some time so, for younger people, if they can get a mortgage and want to live in the Chiswick area, the saving they can make compared with renting is massive.
“An important indicator going forward will be how well the Chiswick Green development sells. The high-priced flats facing out over Turnham Green will be snapped up even at quite rich pricing but the real determinant of the health of the market is how quickly the less attractive units are sold. Sainsbury’s must be keeping a close eye on with a view to the timing of the redevelopment of the Essex Place store.”
Source Land Registry
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
As of September 2023, the average house price in the UK is £291,385 falling by 0.1% compared to the previous year according to the Land Registry. For London, the average was down by 1.1% to £537,000.
The more current Nationwide House Price index showed that average prices across the country were up slightly compared with October but down by 2% over last year.
Commenting on the figures, Robert Gardner, Nationwide's Chief Economist, said, “UK house prices rose by 0.2% in November, after taking account of seasonal effects. This was the third successive monthly increase and resulted in an improvement in the annual rate of house price growth from -3.3% in October, to -2.0%. While this remains weak, it is the strongest outturn for nine months.
“There has been a significant change in market expectations for the future path of Bank Rate in recent months which, if sustained, could provide much needed support for housing market activity.
“In mid-August, investors had expected the Bank of England to raise rates to a peak of around 6% and lower them only modestly (to c.4%) over the next five years. By the end of November, this had shifted to a view that rates have now peaked (at 5.25%) and that they will be lowered to around 3.5% in the years ahead.
“These shifts are important as they have led to a decline in the longer-term interest rates (swap rates) that underpin fixed rate mortgage pricing, as shown below. If sustained, this will help to ease the affordability pressures that have been stifling housing market activity in recent quarters, where the number of mortgage approvals for house purchases has been running at c.30% below pre-pandemic levels.
“While mortgage rates are unlikely to return to the lows prevailing in the aftermath of the pandemic, modestly lower borrowing costs, together with solid rates of income growth and weak/negative house price growth, should help underpin a modest rise in activity in the quarters ahead.
“Nevertheless, a rapid rebound still appears unlikely. Cost-of-living pressures are easing, with the rate of inflation now running below the rate of average wage growth, but consumer confidence remains weak, and surveyors continue to report subdued levels of new buyer enquiries.”
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