|W4 Property Market Calms After Stamp Duty Frenzy|
Home sales in Chiswick maintain momentum into second half of year
Chiswick estate agents have had a hectic spring and summer as clients rushed to complete sales before the expiry of the reduction in Stamp Duty.
The attempt by the government to boost the market during lockdown provided a bigger incentive for sales of larger properties to be done and dusted before the deadline which led to lots of urgent paperwork winging its way around W4.
The figures released by the Land Registry for the second quarter don’t yet show the full level of activity, as the agency has a backlog of up to nine months in publishing the details of transactions, but its numbers do show that the average sale price in the W4 postcode area rose by 13.8% over the year to £1,061,666.
Larger family houses are once again over represented in the sales reported given the proportion of local housing stock they represent. The highest price paid between April and June this year was for a 6 bedroom freehold semi-detached house on Rusthall Avenue which went for £3,625,000 having been bought by the previous owner for £2,750,055 in February 2014.
A detached house on Hartington Road sold for £3,500,000 in April having been bought for £1,230,000 in August 2003.
Relatively high demand for this kind of property appears to have distorted the overall average with terraced house not rising in price over the last year and flat prices increasing only marginally. Over a third of sales in the W4 are during the second quarter were for over a million pounds.
Some concerns had been expressed that the Chiswick property market would hit a wall once the Stamp Duty exemption came to an end but, while the market apparently has calmed from the frenzy in the second quarter, agents are still reporting satisfactory transaction levels.
David Hill, sales director for Marsh and Parsons in Chiswick said, “The market is Chiswick has been building throughout the year. There was the obvious rush for people to take advantage of the stamp duty holiday, however since then we have noticed an increase in demand in the housing market which is proving to be incredibly buoyant coming into Q4. We have a number of off market houses that are attracting offers at and above the asking price. There is a greater supply in the market for one and two-bedroom apartments so they have to be priced correctly in order to sell at the best price.”
Paul Cooney of Horton and Garton said, “There remains to be a huge appetite from buyers eager to secure a property in Chiswick. Many who sold earlier in the year have been forced to rent locally after being unable to buy a home. Horton and Garton have been contacted throughout the summer months by buyers actively looking and it is particularly evident that the demand continues to be strongest for family homes across all W4.
“Typically a positive is often quashed with an equally powerful negative or some would say that 'a good thing can't last forever'…. Whilst Q3 is still well in progress, it is evident that whilst a small incentive for savings in Stamp Duty still remains until next week, demand is not at the levels of the Q2 peak. I am encouraged that the flat/maisonette market seems to be holding its own with good levels of new offers, while the ‘black book’ (quiet marketing) +£2m house market is steaming ahead with no sign of slowing down. Quiet, discreet marketing offers many attractions to my clients but causes chaos for agents transfixed on speculating market share.
“Lack of stock in the £1m to £2m market remains a concern as buyers tend to give up when not being presented with new options. Once buyers make other plans, the market becomes much harder to kickstart in Q1 2022 and delays any real progress in transaction numbers until Q2.”
“Generally I remain optimistic about the future of the property market as Chiswick continues to ‘do its bit’ to increase desirability. New cinema, fabulous Sunday markets and many more artisan shops arriving continues to counteract Hounslow’s apparent desire to take the High Road back to horse and cart and the penny-farthing.”
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
Between May and June 2021, UK transactions increased by 74.1% on a seasonally adjusted basis as volumes recovered from lows seen during the lockdown.
The Nationwide’s House Price Index suggests that the market paused for breath in July with prices falling by 0.5% compared with the previous month.
Commenting on the figures, Robert Gardner, Nationwide's Chief Economist, said, “Annual house price growth slowed to 10.5% in July, from the 17-year high of 13.4% recorded the previous month. In month-on-month terms, house prices fell by 0.5%, after taking account of seasonal effects, following a 0.7% rise in June.
“The modest fallback in July was unsurprising given the significant gains recorded in recent months. Indeed, house prices increased by an average of 1.6% a month over the April to June period – more than six times the average monthly gain recorded in the five years before the pandemic.
“The tapering of stamp duty relief in England is also likely to have taken some of the heat out of the market. The nil rate band threshold decreased from £500,000 to £250,000 at the end of June (it will revert to £125,000 at the end of September). This provided a strong incentive to complete house purchases before the end of June, especially for higher priced properties. For those purchasing a property above £250,000, the maximum stamp duty saving reduced from £15,000 to £2,500 after the end of June.
“The stamp duty changes drove the number of housing market transactions to a record high of almost 200,000 in June as home buyers rushed to beat the deadline. This was around twice the number of transactions recorded in a typical month before the pandemic and 8% above the previous peak seen in March.
“For example, the number of transactions involving properties bought for £500,000 or higher increased by 37% over the 12 months to March 2021, compared to a rise of 2% for all properties. As a result, between Q1 2020 and Q1 2021 the share of transactions involving a property valued at £500,000 or above has increased from 12% to 18%.
“There has also been a shift in the composition of property types that have been transacting. Over the past six months the proportion of sales involving detached and semi-detached properties has increased, while the proportion involving flats has declined significantly.”
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