Musings of a London Property Finder

The RICS (Royal Institute of Chartered Surveyors) have supported our anecdotal musings, stating that price expectations for London over the next six months are positive, given the lack of new instructions and burgeoning lists of wannabe-buyers.  In the RICS monthly house price survey published today, the Institute have declared that they expect house prices in London to rise for the first time in two years.

As we reported last month, the RICS statistics show that London house prices have been largely rising this year.  Their report also signals house price increases for the South West and that prices will remain flat in the South East overall.

The surveyors have made clear that price increases are due to a lack of supply, partly, as a result of the introduction of HIPs, as we have been saying for months.  They suggest that any significant increase in houses for sale is likely to lead to house price deflation once again, as they are currently reproting in the North and in the Midlands.  In fact it seems that there is a direct corelation between the areas where house prices show most growth and the areas where most property for sale.  Supply vs demand.  Simple really.

As for us, we’re sticking with our theory that the back end of this year will be a good time to buy.  Only time will tell whether we or the RICS are right, but if you want the right house at the right price - then this London Property Finder is probably one of the best house price anoraks around!

Technorati Tags: house price crash, London house price crash, London House Prices, London Property Finder, london property search

Tags: house price crash, London house price crash, London House Prices, London Property Finder, london property search

Musings of a London Property Finder

A month ago Anthony Bolton, frequently named ‘Britain’s leading fund manager’ gave an interview to Bloomberg predicting an end to the bear market and said that we are now at the beginning of a long running bull market. 

His reasoning is essentially that from his analysis of previous bear markets, in terms of length and severity, he believes we’ve passed the low point.  He regards sentiment as being at a low not seen since the 1970s, despite some recent improvements and that this has led to investors holding historically high cash positions.  Money market funds in the US are now half the size of the stock market, compared to just 20-25% in previous lows.  Further, on many metrics, stocks are on historically low valuations and he rejects the view that it’s different this time, and that we need to throw away what we’ve learned over the past 35 years. Specifically, he does not expect the S&P 500’s low of 666 to be revisited, and anticipates this rally lasting for several years. 

Bolton has been bullish about pretty much all sectors, including property and questionned the wisdom of holding only traditional ‘recession stocks’ such as government bonds.

This morning it seems rival fund manager Invesco Perpetual’s Neil Woodford has dismissed this view, warning that the downturn has ‘a hell of a long way to go’.  His reasoning is that economic recovery won’t occur until both the UK and global economies have rebalanced, which means reducing leverage and rebuilding the banking system to a point where it is prepared to lend to businesses again.

‘My view is the problems that led to this recession - problems of excessive leverage in the consumer economy, excessive leverage in the banking system - have not been corrected at all,’ Woodford said.

‘There’s been no discernible, no significant increase, in consumer saving. There’s been no rebuilding of balance sheets effectively in the personal sector.  If anything, leverage has increased in recent months and arguably because of course there’s been a fall in asset values and a fall in house prices. So there’s been no paying down of debt. The banking system has to some extent reduced its leverage but I believe it has a hell of a lot further to go.’

Certainly both views are based on truth and this London Property Finder firm certainly won’t be pitting their wits against these two city heavy weights, except to say that there still seems to be a great deal of cash sloshing about, certainly in property, both from within the UK and in-bound as foreign investors pile in.  Who can blame them?  They smell bargains when the Brits stop buying and sterling falls.  As we all know, many fortunes are made out of a recession and the canny are keen to invest where they see value. 

It is true that Joe Bloggs is probably more highly geared than he was 18 months ago, but then it’s unlikely he is going to get us out of the recession, except for the fact that he keeps spending and helping businesses to grow and banks to keep lending.  Also, we work closely with several banks and anecdotally they seem to be lending where the business plan stacks up and they think they are going to get their money back.  And that’s the point.  The mood seems to have changed, people with cash can see opportunities and they know they need to invest to keep their money working.

In my capacity as a London Property Finder, not a week goes by without me spotting a truly amazing bargain and if I had any spare money, I would certainly be shopping and it wouldn’t be shoes!

Technorati Tags: Bottom of the market?, London house price crash, London House Prices, London Housing Market, London Property Finder, London property prices

Tags: Bottom of the market?, London house price crash, London House Prices, London Housing Market, London Property Finder, London property prices

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

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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