Musings of a London Property Finder

Average house prices have fallen 10% over the year to the end of October 2008, according to The Land Registry, the government official House Price Index.

London and Brighton property have not fared as badly, down 8.6% and 7.2% respectively although the picture is very mixed for the South East region as a whole.

Waltham Forest was the worst hit London borough, registering an annual house price fall of 9.2%.  Wandsworth and Lambeth have also been badly hit, with average price falls of -7.3% and -8.2% respectively. 

Westminster and Harrow are the only boroughs to have held onto gains made since September last year, registering annual house price growth of 0.1% and 0.7% respectively.  Southwark and Barking and Dagenham registered the lowest falls with reductions of 0.5% and 1.9% with Bexley, Brent, Enfield, Hackney and Hillingdon closely behind with marginal price falls of circa 2% on last year.

Kensington and Chelsea which has generally held up quite well this year dropped 1.7% in October and registered an annual overall price fall of 3.6%. 

During the first quarter of this year it looked like prices were more likely to hold in London than in the South East.  Todays data shows that many of the Home Counties have out-performed some London boroughs.   

Windsor and Maidenhead where there are a plethora of very large executive homes and often little reason to sell in a downturn, has performed the best of the South East regions, registering price falls of 2.7% over the last year – nothing to write home about.  Price falls of under 5% are reported in Buckinghamshire, Thurrock and Surrey and average house prices in Kent are 5% less on the nose.

All other areas in the South East are registering house price falls of above 5% with the most significant house price deflation in Northamptonshire where average house prices are worth 10% less than a year ago.

The number of property transactions has also continued to fall across the board apart from sales of less than £100,000 and yes, there are some in London – there were 58 property sales in August for under £100,000.

Clients who have chosen us as their Property Search Agents will be aware that negotiated final prices depend very much on the situation of the vendor and the realism of the initial asking price, but that price cuts of 20-30%+ and more have become more common.  As professional Property Finders, we try to dissuade Clients from buying properties which we believe are over-valued but although these figures may sound alarming, they are only of concern to people at risk of going into negative equity.  Most people who have bought wisely and had their homes for five years or more should not be affected.

Homeowners wanting to move who have a reasonable amount of equity in their homes should still be able to do so – the key to a successful purchase in this market is:

1.  Ensure that the discount negotiated off the current market valuation of a new home exceeds any negotiation on the home sold
2. Research the new area thoroughly so that you have a good idea of whether it is going to fare well in years to come and take future price falls into consideration when you offer
3. If you  don’t feel confident about the above – speak to a London Property Finder who does – our number is 020 7923 7564

Technorati Tags: Brighton house prices, Brighton Property prices, Hampshire House Prices, house price crash, house price falls, House Prices, Kensington and Chelsea house prices, Kent house prices, London house price crash, London House Prices, London Property Finder, London property prices, Westminster property prices, Windsor & Maidenhead house prices

Tags: Brighton house prices, Brighton Property prices, Hampshire House Prices, house price crash, house price falls, House Prices, Kensington and Chelsea house prices, Kent house prices, London house price crash, London House Prices, London Property Finder, London property prices, Westminster property prices, Windsor & Maidenhead house prices

Musings of a London Property Search Agent

Nationwide published their House Price Index for November today with news that falls in the Property Market stabilised in November and that conditions were right for demand to rise again if the availability of credit improves.

Fionnuala Earley, Chief Economist of Nationwide comments:

“Turnover rates in the housing market have fallen to historic lows, even below the levels in the 1990s

when the economic conditions were worse than they are today. At the trough of the market in Q4 1990, interest rates were at 14% and there were almost double the number of unemployment claimants, yet a greater proportion of owner occupiers were taking out mortgages to move house. The significant difference today is the financial market shock which has led to the severe tightening of credit. In Q4 1990, 60% of first time buyers were taking out loans with LTVs above 90%, today the equivalent proportion is 14%. While this may reflect less desire on the part of borrowers to borrow at high LTV, especially given its higher cost, it also implies that part of the reduction in turnover today is likely to be due to the availability of finance at higher LTV.

€œNot all of the limits on lending will be due to the turmoil in the markets. Some will be due to more traditional underwriting criteria taking effect in a slowing economy with falling house prices and some will be due to more accurate pricing of risk. Nevertheless it is clear that the uncertainties in the financial markets are still affecting the availability and costs of funds in the markets as banks deleverage, and this has an effect on borrowers. If funds once again became more freely flowing as a result of Crosby€™s recommendations, this could stimulate levels of activity in the market and thus help to promote a swifter recovery. While there is still a great deal of uncertainty about the appetite of investors for mortgage backed securities, a government guarantee may be the catalyst required to restart this market and begin to add liquidity, especially as affordability is now improving.€

 In short – blame the bankers who bought into sub-prime.  There is still demand for UK property, and homes in the South East in particular.  If the credit crunch eases then so will the woes of the housing market.  This London Property Search Agent is optimistic about property prices in the medium term – our advice is to buy now if you canraise the funds.

Technorati Tags: affects of the financial crisis on the housing market, credit crunch, House Prices, London Property Search Agent

Tags: affects of the financial crisis on the housing market, credit crunch, House Prices, London Property Search Agent

Musings of a London Property Finder

As the final stages of the planning bill are due to be debated in the House of Commons next week, we thought we’d remind you what’s right with it and what’s wrong, in case readers fancy a little last-minute lobbying of their MPs.

The Good:

• An Independent Adjudcator will preside over disputes and appeals;
• The Community Infrastructure Levy will be based on more than sales uplift alone;
• Economic viability will be taken into consideration when setting the levy.

The Bad:

• The Planning Gain supplement has not been repealled
• The Bill appears not to have teeth to force local authorities to implement infrastructure plans with money collected as part of the Community Infrastructure Levy

Also

• Residential homeowners with detached homes will benefit from the new rules on when planning permission is required however because most Londoners and many residents of the South East live in terraced  or semi-detached housing, the new rules will largely not apply because they base the need for planning permission on proximity to neighbours. 

Of most concern is the planning gain supplement which could effectively halt private development by small developers with the result that local authorities will miss housing targets to an even greater extent than they do at present.  Tough policies on affordable housing and punitative section 106 agreements have meant that this has already happened.  Take South Cambridgeshire for example.  The need for 50% affordable housing and detailled policies on garden and parking provision make it hard for developers to make schemes work.

There should be more news next week – the London Property Finder will keep you posted.

Technorati Tags: developers, development land, London Property Finder, Planning Bill, Planning Gain supplement, Planning Permission

Tags: developers, development land, London Property Finder, Planning Bill, Planning Gain supplement, Planning Permission