Are Chiswick Property Prices at a Tipping Point?

'Firth effect' drives down average price in second quarter

A house on Woodstock Road was the most expensive sold in the second quarter of 2023 at £3,700,000. Picture: Facebook

September 17, 2023

The latest figures from the Land Registry show that, up until the first half of this year, residential property prices in the Chiswick area have remained firm.

The average sale price in the W4 postcode area for the second quarter of 2023 was £1,160,276 an 8.2% rise over the same period last year.

The level was down by 4.9% compared with the first quarter of the year but this is being put down to the ‘Firth effect’. The actor’s home in Bedford Park was sold to former deputy Prime Minister Nick Clegg for over £8million and the house next door changed had around the same time.

Coincidentally, the highest priced sale in the second quarter was on the same road for £3,700,000 less than half the amount of these two properties. This difference accounts for much of the fall in the average during the latest period.

Christian Harper of Harpers of Chiswick commented, “As these latest figures demonstrate, the Chiswick market remains resilient in key areas, despite speculation and endless numbers of quickly written headline grabbing articles and reports from a variety of sources. This week alone we have heard from two of the largest building societies and the RICS, all suggesting that prices have or will fall. Doom and more doom. Whilst I have to respect their opinions I can't agree on a local, Chiswick level. As most will know Gill and myself are a husband and wife team who have been working in Chiswick for thirty years. This enables us to be somewhat separated from typical estate agency practice as we tend to sell and let for clients that have either known us for years or bought through us when they first moved to Chiswick. Admittedly the majority of our Q2 and now Q3 agreed sales have been achieved though networking rather than via Rightmove, but even new buyer levels are up from Q1 2023… In summary, I have to say that things are not looking at all bad. As I am writing this comment, we have just received an offer on a +£2m house that we introduced to a private buyer (without public marketing) that we only started discussing on Wednesday.”

The Royal Institution of Chartered Surveyors (RICS) survey Christian refers to is for the month of August and it presents a downbeat market backdrop, as buyer demand and agreed sales by its measures continue to fall sharply in the face of higher mortgage rates across the country. Alongside this weakness in activity, it says house prices remain on a downward trajectory, with the latest survey feedback pointing to an acceleration in the pace of decline through August.

It concludes, “Marking the most negative reading since February 2009, when disaggregated, virtually all parts of the UK are now seeing a relatively steep fall in house prices.”

Mateo Asminian, part of the sales team at Andrew Nunn & Associates, had already marked a more cautious note in his second quarter report with sales and enquiries down.

He concluded, “It is no secret that W4’s excellent schooling, amenities and transport links make it an extremely popular area for families in search of a ‘forever’ homes – and, as we often tell buyers, ‘when they’re gone, they’re gone’… typically, for decades. Through these long periods of repayments and organic capital growth, house owners are more likely to have built sizeable equity in their properties, providing a cushion during turbulent economic times and meaning that fewer houses sold are ‘forced’ sales.

“Furthermore, we are undoubtedly now feeling the domino effect of the spike in activity of the last couple of years, with many families having brought their moves forward, or finally realised them after the uncertainty of Covid-19 had neutralised and with reports suggesting it was a good time to sell. As a result of these two factors, those searching for houses in Q2 of this year had 12% fewer options to choose from than Q2 of 2022. Instructions for flats also showed a deficit when comparing to last year, this time of 14%, as we see offices continue to encourage workplace working, making switching a flat for an affordable house further away from the city less appealing.”

He noted that the pressure to offload due to higher mortgage payments was being felt most keenly in the flats sector and it was with this type of property where the asking price was being achieved less often.

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

Another local agent working for a larger chain said, “I believe the Chiswick market will be relatively stable compared to the rest of the country. Homeowners are generally sitting on a lot of positive equity and the loan to value ratio in the area is well below the national average.

“However, with such a rapid and unexpected rise in interest rates, an increasing number of people will be experiencing pain. The most vulnerable sector is buy-to-let. Earlier tax changes had already taken the heat out of this part of the market which is just as well as, although rents are supporting yields, this is not enough to cover the interest cost rise for many landlords.

“There are still cash buyers to soak up available stock for now, but I’d anticipate that high borrowing costs will accelerate the decision to downsize for those who were considering it and still had a residual mortgage to pay off. There are also going to be people who have overextended and are just hanging on for now in the hope that interest rates will turn but they can only do this for so long. As all this plays out, I’d expect an equilibrium price level of about 10-15% below current level but no more because yields provide a solid floor for the market.”

Data from the Land Registry for England showed that prices had risen by 1.9% over the 12 months to June 2023 making the average house price £306,000. However, London was the one area of the country where prices fell over the year down by 0.6% to £528,000. This is the first fall for London since November 2019, when average house prices decreased by 1.2%. This is also the first fall seen in any of the English regions since May 2020. While the average house price in London increased by £3,000 between May and June 2023, there was a larger increase of £9,000 between the same months last year.

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