With less than a home a day selling in W4 they believe fundamental change needed

Transaction levels in the residential property have continued to plummet to the extent that some local agents see the market as being effectively broken. Currently less that a property a day is selling in the Chiswick area with so far only 70 sales having been reported to the Land Registry for the second quarter of this year.

Andrew Nunn of Andrew Nunn Associates believes that the main problem is the increases in stamp duty which took place last year.

He said, “once again the low levels of turnover (in what is meant to be the busiest quarter of the year) demonstrate why the Chancellor really does need to take a long hard look at stamp duty in the Autumn statement.

“Recent news coverage suggests he is getting pressure from certain ministers to review stamp duty as it is singularly stagnating the market. The punitive stamp duty costs taken out of nett earnings just to move ‘round the corner’ or ‘over the road’ prevent the majority of would-be buyers and sellers from entering the market.

“Numerous businesses associated with property transactions are also suffering and so an overhaul of the previous chancellors ‘meddling’ should ideally happen sooner rather than later to provide more fluidity in the market. “

The increases in stamp duty that were introduced in April 2016 have seen Government revenues increase with the HMRC reporting estimated receipts for the first quarter of 2017 at £1.9bn from residential transactions and £789m from non-residential transactions. However, changes seem to be disproportionately affecting areas like Chiswick. The increases particularly targeted ‘additional properties’ in an attempt to stop buy-to-let buyers crowding out owner occupiers but the punitive rates which rise to 15% on a property over £1.5million have resulted in the market ceasing to function effectively.

Andrew warns that isn’t just something for estate agents to worry about. He says, “Should turnover continue at these present levels then there is going to be a significant glut of new build property languishing un-sold on the open market which will be damaging to the short term fortunes of London housebuilders, probably causing them to ‘mothball’ future schemes which in turn could have a real negative impact on employment in the construction industry and finally hamper the wider economy. “

Christian Harper of Harper Finn on the other hand believes part of the answer to the problem lies in a reduction in transaction costs.

He says, “I can’t think of one other industry that is able to expand with new shopfronts when the turnover possible has reduced so much across all agents in Chiswick. I know I sound like a turkey voting for Christmas but isn't it time that estate agents adapted their fee model and stopped making so much money?

“On a positive note, over the past six months 'online only’ agents such as Purple Bricks have gained a huge market share in Chiswick from the ‘walnut veneer’ brigade on Turnham Green Terrace. Now clients have many more choices when selling or letting - traditional agents charging traditionally high fees, online only agents charging pennies in return for you doing some of the work or the hybrid, professionals like Harper Finn that combine the experience and ‘black book of clients' that only 25 years of Chiswick knowledge will bring, we do all the work, but at a fraction of the fee. “

He points out that Bairstow Eves, an agent within the same group as Hamptons International and John D Wood (two agents on Turnham Green Terrace) are now offering an alternative to traditional agency by charging from £999 inc. VAT to sell a house. With this in mind, how long can John D Wood and Hamptons of the same company justify the fees that they are currently charging you to sell and let property in Chiswick asks Christian.

However, not all agents believe fundamental changes are required. Paul Cooney, Director of Horton and Garton's Chiswick office, says that they have agreed 23 sales across their two offices in Chiswick and Hammersmith during the second quarter. He puts this down to pricing properties accurately.

Paul says, "Independent research recently conducted by Which? and Rightmove demonstrates the properties listed at the right price from day one statistically achieve a better sale price than those initially priced too high. Simply put, it's a fact that if you price 5% too high, your property won't achieve it's true value. Our office in Hammersmith is number one for sales and lettings in W6 and our office in Chiswick is already one of the top performing in W4 for sales agreed after only four months of business. This is because our clients trust us to know that accurate pricing generates the most interest and ultimately achieves the highest offers from the best buyers. In Q2, I found that Chiswick residents were ready to move and actively searching for their next home. While August is historically quiet with many buyers and vendors taking a break for some much-needed Vitamin D, in the first fortnight of September the market, and competition for the best properties, heats up. At Horton and Garton, we're bracing ourselves for a busy Autumn."

With such low volumes the direction of prices remains difficult to calculate but the overall average for the W4 post code are remains just below the £1,000,000 mark. The price of the average terraced house in the area still averages over seven figures.

Despite the broader lack of activity in the market there is still demand for large family houses in the Chiswick area. A five bedroom detached house on Wellesley Road sold for £3,100,000 and a six bedroom semi-detached property on Airedale Avenue changed hands for £2,675,000.

Simon Rubinsohn, RICS Chief Economist sees the lettings market as being stronger than the sales side. He said, "It is noticeable that the amount of new rental instructions coming through to agents is continuing to edge lower, which is not altogether surprising given the changing landscape for buy-to-let investors. One consequence of this is that rents are expected to continue rising not just in the near term but also further out and at a faster pace than house prices."

During June 2017 London was the second worst performing region of the country after the North East according to the Land Registry with prices rising by 2.9% over the year to average £482,000.

Prices in England as a whole increased by 5.2% over the year to June 2017, with the average price now £240,000.

The number of completed house sales in London in January, the latest month for which figures are available, fell by 26.3% to 5,968 compared with 8,093 in January 2016.

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ChiswickW4.com is the only place that you will find detailed analysis of the Chiswick property market.

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 27, 2017