Could Empire House Revive Chiswick Property Market?

More units in the development than reported sold in W4 so far this year

The Chiswick Green scheme including Empire House is nearing completion

August 19, 2024

Estate agents in Chiswick have continued to struggle with a moribund sales market so far this year with turnover remaining at historically low levels.

The number of homes changing hands in the W4 postcode area has been similar to that seen during the banking crisis and the early stages of the Covid-19 lockdown.

Just over 100 sales have been reported by the Land Registry so far this year which is below the 137 flats and houses which make up the Chiswick Green development around Empire House on Essex Place and the High Road. The outer structure of the building is complete with work continuing for now on the interiors and Phase 1 expected to be finished in a few weeks.

Estate agents locally differ on what the impact of this scheme will be and the market’s capacity to digest the units. Some see it as a uniquely attractive landmark development which will ignite interest in the area with others sceptical that, aside from the units in Empire House with spectacular views across London, it will be hard for Great Marlborough Estates to make sales.

Some agents have commented that the sales effort for the project seems to be very low key with little marketing taking place and the sales office banished to an obscure corner of Essex Place. This could be an indication of strong demand for the units which start at £580,000 or it could mean that alternative strategies to market sales are being considered for all or some of the units. Estate agents have reported that they have been invited to market some of the flats for rent rather than for sale.

Andrew Nunn of Andrew Nunn Associates said, “Instinctively my guess would be the premium flats may have been sold i.e. the ones high up, with views, on the south and west facing elevations but the rest have struggled to get any interest – this may improve once the agents can get buyers into the physical units rather than selling ‘off plan’ .

“Not sure this is a fair representation of the general market however. New builds tend to attract investors and overseas buyers and we don’t have too many (any) of them and the properties also carry a ‘new build premium’ which is a very hard sell in an economy where most people are cost conscientious. Period property with minimal risk is the popular property type currently and they seem to be selling really quite well.”

Christian Harper of Harpers of Chiswick admitted to being unsure about how the Chiswick Green was faring but said the local sales market continued to be very quiet, adding, “I am hoping for a massive uplift if a couple more interest rate reductions take place before the government make fundamental changes in the upcoming budget!”

Another local estate agent working for a large chain was less optimistic saying, “The perverse thing about the market over the last year is that higher interest rates appear to have been supporting capital values. This is obviously unexpected but what seems to have happened is that landlords have put up rents to cover higher mortgage costs. At the same time, some who are particularly stretched have looked to secure vacant possession with a view to selling creating a squeeze on supply in the rental sector. However, they have found it difficult to sell at prices that are more bearable than the burden of their interest costs.

“For that reason, I can’t get too excited about a price surge due to lower interest rates. In fact, the reverse may happen. Less financial pressure on landlords might make them less keen to ramp up rents and to focus more on tenant quality and some may abandon sales and start to relet homes they had on the market. I haven’t actually seen this happen yet, but it is early days.

“If there is any benefit from lower borrowing costs, this may be outweighed by tax changes both at the local and national level in the next budget.”

Andrew Nunn sees things differently and he commented, “The recent base rate drop and subsequent drop in the cost of fixed rate mortgages has certainly added a little excitement and momentum to the market with buyers becoming more eager to find. We have definitely noticed an upturn in activity in what is seasonally a very quiet month. This bodes well for a strong September and October market for those buyers and sellers wanting to transact prior to the end of the year.”

A spokesperson for Great Marlborough Estates said, “Sales at the Chiswick Green development have been progressing exceptionally well. While Great Marlborough Estates prefers not to disclose specific numbers at this time, a substantial portion of units throughout the building, including those not facing the park or offering expansive views, have already been sold. This reflects the widespread appeal and strong market interest in the development.

"The marketing suite has been strategically relocated within the development itself, a decision made to provide prospective buyers with a more integrated and convenient experience when engaging with the property. In response to speculation regarding rental strategies, Great Marlborough Estates has clarified that none of the units at Chiswick Green are being offered for rent. The developer remains focused on the successful sale of these homes and is confident that demand will continue to be robust as the project approaches the completion all buildings at the end of next month.”

With such low volumes of sales in Chiswick currently, it is impossible to reach firm conclusions about the general trend of prices but the average for the W4 postcode area has remained around the million pound market in the first and second quarters of the year.

Demand continues to be strong for larger family houses with two of the higher priced sales in Chiswick so far this year being in Addison Grove, one at £4,300,000 and the other at £3,750,000. Red Lion House on Chiswick Mall changed hands for £4,250,000.

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

Nationwide’s House Price Index for July saw the average sales price in the UK rise by 2.1% compared to the same month in 2023 to £266,334. However, prices are still around 2.8% below the all-time highs recorded in the summer of 2022.

Robert Gardner, Nationwide's Chief Economist, said, “Housing market activity has been holding relatively steady in recent months with the number of mortgages approved for house purchase at around 60,000 per month. While this is still c.10% below the level prevailing before the pandemic struck, it is still a respectable pace given the higher interest rate environment.

“For example, for borrowers with a 25% deposit, the rate on a five-year fixed rate deal has been around 4.6% in recent months, more than double the 1.9% average recorded in 2019. As a result, affordability is still stretched for many prospective buyers. Indeed, for an average earner buying a typical first-time buyer property, the monthly mortgage payment is equivalent to around 37% of take-home pay, well above the 28% prevailing pre-Covid and the long-run average of c30%.

“Investors expect Bank Rate to be lowered modestly in the years ahead, which, if correct, will help to bring down borrowing costs. However, the impact is likely to be fairly modest as the swap rates which underpin fixed-rate mortgage pricing already embody expectations that interest rates will decline in the years ahead.”

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