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Letter From the Home Counties:
Turning the wheel on a tanker
There is no doubt that the Home Counties market remains buoyant, says Garry
Collins. The appetite to buy is certainly out there and vendors which bring their
properties to the market at a sensible price are achieving the desired outcome, but the
message of ‘adjustment’ seems to be taking its time to filter to ground level…
simple imbalance of supply and demand, as well as factors including vendor expectations,
agents competing for instructions in a challenging market and of course,
A
bullish media reports, all combined to create a somewhat ‘superficial’ first quarter.
This saw prices pushed beyond many vendor and agent expectations. Year on year,
prices in London rose by as much as 18% in some parts, and this had a ripple effect on
prices here in the Home Counties.
However, it would appear that London buyers are starting to feel that enough is
enough. Over the last month, we have started to see prices stabilise, echoed most recently
by figures released from the Land Registry revealing average house prices held steady
between May and June.
This suggests recent moves to tighten mortgage lending rules, perhaps combined with
the anticipation of an interest rate hike at the end of the year, could have started to cool
the market.
Just like turning the wheel on a tanker, it takes a while for everything to catch up
This is no bad thing; the property market is very adept at coping with periods of
adjustment but, just like turning the wheel on a tanker, it takes a
while for everything to catch up. At present, vendors are still being
influenced by reports of rising property prices and so naturally
want to achieve the best possible price for their home. However,
even in the current market where demand is high, over-ambitious
pricing will only achieve viewings; these won’t necessarily convert
into sales, particularly at the top end of the market where price
rises haven’t been as steep as the middle-market.
There has, however, been a slight rise in sale of properties over
£1million which can be partly attributed to rising prices over the
last six months, pushing more properties over this price bracket. It
could also be linked to more people moving out of the capital after
achieving a top price for their city home. Those buyers looking in
the £1m and above bracket are less likely to rely on financing, and
those that do tend to, have substantial equity, say 50%, therefore
are less affected by the recent Mortgage Market Review. Q
Just like
turning the
wheel on a
tanker, it takes
a while for
everything to
catch up
Garry Collins is Manager
of Waterfords Sunningdale
and Chobham
www.waterfords.co.uk
p.14
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