|Chiswick House Market 'Emerging from the Gobi Desert'|
Agents believe sales will pick up after grim six months
Estate agents in Chiswick are generally optimistic that business can't continue to be as bad as it has been for the last six months and are looking forward to a bright start to the year.
After a brief mini-boom in the first half of 2021 due to the Stamp Duty holiday, the number of sales of homes collapsed in the second half of the year.
So far, the Land Registry has only recorded 45 sales in the W4 postcode area since the duty exemption ended which provides slim pickings when spread among the still significant number of agents' offices in the area. Some offices are rumoured to have not made a single sale since last June.
There has been some consolidation with Barnard Marcus, for instance, reducing the number of branches it has in the area but the number of closures that was originally anticipated has not materialised. Local agents say that larger chains have been competing to acquire the lettings business of struggling smaller firms as this part of the market remains very robust. Any agent that was dependent on sales has had to work hard to stay in the game.
The average sale price has remained steady at around a million pounds where it has been for the past several years. This has been propped up by demand for larger houses remaining stronger than that for flats and maisonettes. Over 10% of the sales recorded in Chiswick since the end of June 2021 have been for over £2,000,000.
The highest price paid in the period for a house in the Chiswick area was £4,150,000 for a detached house on Priory Avenue which had previously changed hands for £3,910,000 in November 2018 and £1,600,000 in May 2005.
The behaviour of the market confirms the predictions made by Christian Harper of Harpers of Chiswick last year. Looking forward he is slightly more optimistic about the coming months saying, "History shows that in many cases lower stock levels can generate higher prices, with buyers having to compete over fewer houses. These buyers are typically buyers who are 'Rightmove surfers’ and new to the area. Then again, history also shows that lower stock levels don't flush out the ‘I wasn't even looking' buyer/seller. These are the clients that have no desire to move but after seeing a Harpers of Chiswick For Sale board, decide to move to a dream house and instruct us to sell another Chiswick house. Two houses marketed rather than just the one. As 65% of Chiswick buyers already live in Chiswick…..I fear that such low levels of tradable stock may have a detrimental impact on the entire property market if we can only rely on the Rightmove surfers."
He adds that the flat market is making good progress and that there is high demand for well-priced units bringing the level of activity at his office back to the levels seen prior to the expiry of the Stamp Duty holiday. Christian believes the renewed surge down to something he has experienced before, people making the decision to buy because they are anticipating higher interest rates and wanting to lock in favourable terms on fixed rate mortgages. However, he cautions that while a small rise in rates may actually help the market, the case could be very different if there were there to be subsequent rises.
He also is seeing renewed activity in the buy-to-let sector despite all the additional tax disincentives and describes demand as 'off-the-scale' with properties being let with 48 hours of marketing.
David Hill, Sales Director for Marsh and Parsons in Chiswick echoes these views commenting, "We have been inundated with demand from buyers and with the stock of properties on sale at its lowest level for as long as I can remember, sellers are in for a prosperous time - but there is no way to predict how long this will last for. I would advise beating the curve – don’t find yourself waiting for spring when it is inevitable that more stock will come to the market with the warmer weather Take advantage of the market now and you’ll enjoy excellent rewards."
Another manager at a Chiswick estate agency was slightly more cautious saying, "I know people are going to reach for their tiny violins when I say this, particularly in the context of what has been happening in the world at large, but the last year has been truly miserable. We started the year in a highly stressed environment in which the already fraught exercise of selling a home had been made doubly so by the ticking clock of the expiry of the Stamp Duty holiday.
"Then overnight, there is a switch to tumbleweed with staff seeking ways to look busy. It has been truly grim. Inevitably head office thinks the answer is more leafleting campaigns which at least does get the phones ringing - with people complaining about being sent leaflets!
"I don't believe this level of activity is the 'new normal' and think we will emerge from this Gobi Desert during the course of this year. I think Grove Park will do particularly well despite most people there hating the traffic restrictions. For younger buyers who aren't car dependent they make the area even more attractive. However, the relatively poor public transport is holding people back - if there is no improvement in the local train service then many buyers will look elsewhere. Although, Work From Home is increasingly prevalent particularly among the kind of people who can afford a house in Grove Park, there usually remains a requirement to visit the office regularly."
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
London has been the poorest performing area for house prices in the UK rising by only 4.2% in 2021 according to the Nationwide's House Price Index. Overall UK property saw double digit price growth (10.4%) with Wales the top performing area at 15%. This was the strongest calendar year for house prices since 2006.
Commenting on the figures, Robert Gardner, Nationwide's Chief Economist, said, “The price of a typical UK home is now at a record high of £254,822, up £23,902 over the year - the largest rise we’ve seen in a single year in cash terms. Prices are now 16% higher than before the pandemic struck in early 2020.
“Demand has remained strong in recent months, despite the end of the stamp duty holiday at the end of September. Mortgage approvals for house purchase have continued to run above pre-pandemic levels, despite the surge in activity seen earlier in the year. Indeed, in the first 11 months of 2021 the total number of property transactions was almost 30% higher than over the same period of 2019.
“At the same time, the stock of homes on the market has remained extremely low throughout the year, which has contributed to the robust pace of price growth."
He continues, “However, the outlook remains extremely uncertain. The strength of the market surprised in 2021 and could do so again in the year ahead. The market still has significant momentum and shifts in housing preferences as a result of the pandemic could continue to support activity and price growth. Indeed, the Omicron variant could serve to reinforce the shift in preferences in the near term."
If you want to receive regular updates on the Chiswick property market with informed comment from the best local agents sign up for our weekly e-mail newsletter.