Home values surge to record level as agents cry out for stock to sell

Already heady Chiswick property prices have seen accelerated rises so far this year according to the latest official figures.

In the second quarter of 2013 sales prices in the W4 post code area averaged £825,587 up by 18.2% on the same period last year and an all-time high by a significant margin.

56 terraced houses sold during the period at an average of over £1,000,000 and the average price for all property in the Bedford Park area is now over a million with flats in that part of Chiswick now averaging over £500,000.

A survey of local agents shows a consensus that a lack of stock is causing the precipitous price rises and some fear a possible bubble if the demand/supply imbalance remains.

Joe Williams of Savills' Chiswick ‘Recently Chiswick has seen sales of large properties with accordingly high transaction values that may have lifted the overall average, but the Land Registry figures indicating this trend across many property types confirm that the area is accelerating as a desirable destination to live or invest.’

Savills handled the sale of Prospect House on Strand on the Green which became the second most expensive property sold in Chiswick recently changing hands £6,675,000. Their research department had originally thought that tax changes would lead to static prices in London’s prime residential markets static through 2013. The tax changes of the 2012 budget now appear to have been absorbed by the market more readily than expected. As a result they have brought forward some of the price growth which they forecast for the next five years. With prime property, its taxation and the impact of international investment all under political scrutiny, they believe the next test of the market will come in the run up to the next general election.

Andrew Nunn of Andrew Nunn Associates, ‘The “record prices” reflect a number of issues which have come together at the same time: these influences are 1. A general shortage of quality homes for sale 2. The short length of time they are exposed to the market (creating hype) 3. Relentless demand from all over the planet for London (Chiswick) property 4. An increase in mortgage funding generated by recent Government incentives to the lenders 5. A greater degree of certainty over the next 2-3 years that interest rates will remain low supported by the recent Bank Of England statement.’

Andrew says stock levels have been declining since 2007 and feels this trend will continue for the next couple of years thus putting upward pressure on price. Even through the seasonally quieter months he has seen a number of properties sell for over the asking price and/or going to best and final offers as demand continues to outstrip supply.

He concludes, ‘So the burning question needs to be … Is this trend part of the journey for London (Chiswick) becoming a true global City with property prices to match and therefore it is sustainable growth?……..or alternatively ...... how big will the bubble really become? All answers welcome!’

Christian Harper of Oliver Finn said, 'We have certainly seen an unforeseen leap in prices caused by a further lack of good quality stock. I forecast this rise if stock levels didn't improve in Q2 2013 and it certainly came. The most interesting rise is in the one/two bedroom flat market. Although I have been valuing property in Chiswick for over 20 years I have found it increasingly difficult to pin an exact figure on initial expectation. As an example I valued a flat at £350k that some agents valued at £325k. After a quiet initial marketing campaign we achieved £373k in sealed bids, some £50k over some agents expectations. This rise is very encouraging across the whole market however we all want to avoid the possibility of a sharp rise followed by an even sharper fall! It is suggested that we will see a 20% increase over the next two years and I would like to see a more balanced incremental rise to avoid the spikes.’

Mark Poole, Branch Partner at F J Lord, Chiswick says ‘In the majority of cases, offers on our properties are at or above the upper end of the guide price, which shows that buyers realise they need to make strong offers to be taken seriously. For example, the offer that was accepted on a contemporary townhouse in Corney Reach has set a new price record for the road.’

He also thinks Chiswick’s inclusion in The Sunday Times 'Best Places to Live in London' has helped promote the area to Asian and European investors who like proximity to Heathrow and its comparative good value to Kensington and Chelsea.

Alastair Hilton, Sales Manager, Winkworth Chiswick, 'We are experiencing massive demand from buyers and there is a real lack of stock for sale. This means that for every property available, there are numerous buyers.

“We have just taken on a two bedroom apartment that was under offer through another agent but the sale fell through. We added another £10,000 to the asking price (£15,000 over the previous offer) and have had a full asking price offer on it in two days.

“I also have a one bedroom apartment in the middle of Chiswick at £350,000. We are waiting for the tenants to move out at the end of the month before conducting viewings. So far, I have 35 cash buyers who want to view the apartment as soon as possible.”

Alastair also feels there is a ‘ripple’ effect from central London were overseas buyers have driven prices up and are now looking west for relatively cheaper property.

The sharp rises seen in Chiswick have been mirrored in other West and South West London post code areas where prices have also been hitting record levels.

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 16, 2013