Buyers looking for 'forever home' as agents adapt to the new normal
View from The Tides on Chiswick Mall which went for £4,000,000
Chiswick estate agents are reporting that pent up demand is leading to a surge in activity in the W4 property market since they were freed from lockdown restrictions.
It is just over five weeks since the government allowed people to move and agents to show property but buyers and sellers who were forced to put their plans on hold are now proceeding even though the way of doing business has changed in many ways.
In addition, the consensus among agents is that, despite the grim economic background, people still have enough confidence in the local market to make the financial commitment required. Many of the buyers currently seem to be looking for their ‘forever home’ and therefore prepared to disregard short term volatility in the market if the place they really want becomes available. Signs of a recovery seen in the first quarter, confirmed recently by the release of figures by the Land Registry, were stopped dead in their tracks when the lockdown was imposed at the end of the first quarter but the suggestion is that the momentum seen earlier in the year hasn’t entirely disappeared.
Julian Masson of John D Wood & Co on Turnham Green Terrace says that confidence was increasing earlier in the year and they had agreed a number of ‘exceptionally high prices’ but when the pandemic hit the sales collapsed. He adds, “Since re-opening our office and emerging from lockdown, people seem to be adjusting to the ‘new normal’ with the increased use of PPE and social distancing measures. We have been very busy due to the pent up demand with an influx of new buyer registrations, numerous offers and instructing new properties for sale. Some buyers and sellers remain cautious which seems to be compounded by nervousness amongst lenders, for example Nationwide are tripling its minimum deposit from 5%-15% for first-time buyers.
“Although the outlook for the mortgage market becomes more stringent and property prices remain uncertain, Chiswick has and always will remain a resilient and popular location of West London to live and the demand for people finding their future home is evident in the activity levels and offers received on a number of new instructions we have launched to the market. Overall we are optimistic that the market will settle down providing a new balance particularly for medium-higher priced properties and levels of interest will continue to increase.”
Paul Cooney director of Horton and Garton says his team is working on completing a fully virtual sale of a home in Magnolia Road and they have managed to find the seller their ‘forever family home’ in Grove Park with sale and purchase on track for summer completion. The firm has completed millions of pounds worth of sales since lockdown ended and taken on millions more in listings. With the philosophy of ‘share your luck’ in mind they are making donations to local charities for every sale completed between now and Christmas.
Christian Harper managing director of Harper Finn said, “We noticed a spike in activity as soon as the commitment to Brexit has been confirmed and I was looking forward to reporting much better news in Q2. Unfortunately CV-19 caused the market to stop in its entirely, which will certainly be reflected in the Q2 results. May I take this opportunity to thank each and every person who has helped others in Chiswick during this terrible time. Thank you.
“Even though life hasn’t returned to what we all remember, I am delighted to report that I am expecting much better results from now onwards. The market has returned with a sense or energy that we haven't seen for some time. I’m not the type to use this as an opportunity to ’sell my wears’ however if you are thinking of selling or letting your Chiswick property, things are looking pretty good! Buyers are back with confidence and tenants are looking to find new homes before the start of the new school year in September.”
Another local agent who asked not to be named said, “I can’t predict what will happen next week, let alone for the rest of the year so don’t ask me where I think prices are going. What I do know is that there will be big changes on the high street for the estate agency business. A lot of chains set up shop believing that just a few sales would cover their costs and give them a toe hold in the market. The sales-only business model is broken and people don’t by houses any more after spotting it in an estate agents window. To survive it will be necessary to have a steady income from lettings to weather any future storms ahead and a strong local brand and reputation which can only be built up after years of effort. Quite a few local operators don’t have these attributes and not all furloughed staff are reappearing in their Chiswick branches. There are suggestions that a least one big chain with a W4 branch is looking at CVA which will get them out of expensive leases they have signed. A consolidation in the area is, to be brutally frank, long overdue.”
According to the Land Registry data the average sale price in Chiswick so far this year is £1,153,237 with all transaction reported so far having taken place before lockdown. The headline number suggests that the market was particularly strong during the first quarter of the year with the average sale price in the W4 postcode area rising by 20.7% over the same period last year and an eye-popping 42.6% over the three months at the end on 2019.
|Chiswick Property Prices - (January - March 2020)|
|Sales||Overall Ave||Total Sales|
|Change in Quarter||48.3%||50.0%||21.4%||15.4%||-3.3%||-46.7%||8.6%||-72.6%||42.6%||-56.4%|
|Change in year||191.9%||50.0%||30.0%||0.0%||-1.7%||-34.7%||-14.3%||-40.8%||20.7%||-31.3%|
|Change in three years||85.2%||-62.5%||-15.3%||7.1%||-10.1%||-20.0%||-3.5%||-52.5%||7.7%||-35.8%|
|Change in five years||148.6%||-40.0%||7.5%||36.4%||0.5%||-13.5%||-2.8%||-69.5%||41.1%||-46.6%|
|Change in ten years||279.9%||-25.0%||80.0%||-46.4%||38.7%||-34.7%||59.0%||-62.3%||85.2%||-50.0%|
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
The huge quarterly jump was largely down to the sales in the Pocket Living development coming through before the end of last year which artificially drove down the average.
The increase over last year is also something of a statistical quirk with the prices of both flats and terraced houses falling despite the large rise in the average. The increase was driven by an increase in the number of large family houses selling. As well as Eamonn Andrew’s old house on Hartington Road changing hands for £8 million having been listed for £10 million, there were seven sales for over £2 million including a house on Dukes Avenue that went for £4,600,000 and The Tides on Chiswick Mall which was sold for £4,000,000. Over 10% of sales in Chiswick were in the multi-million pound price bracket and it appears to be this type of transaction that local estate agents are pinning their hopes on.
According to the Land Registry’s House Price Index, London was the best performing region of the country seeing a 4.7% rise in prices up to the end of March 2020. This brought the average price in the capital to £485,794. The rise for England was of 2.2% bringing the average property value to £248,271.
The Nationwide’s House Price Index showed a similar picture with a 3.7% annual growth rate for prices up until the end of April, the fastest since February 2017.
Commenting on the figures, Robert Gardner, Nationwide's Chief Economist, said, “In the opening months of 2020, before the pandemic struck the UK, the housing market had been steadily gathering momentum. Activity levels and price growth were edging up thanks to continued robust labour market conditions, low borrowing costs and a more stable political backdrop following the general election.
“But housing market activity is now grinding to a halt as a result of the measures implemented to control the spread of the virus, and where the government has recommended not entering into housing transactions during this period.”
He added that while the low level of transaction might mean it is difficult to calculate the index in the short term, “the raft of policies adopted to support the economy, including to protect businesses and jobs, to support peoples’ incomes and keep borrowing costs down, should set the stage for a rebound once the shock passes, and help limit long-term damage to the economy. “
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June 21, 2020