Two Tier Property Market Emerging in Hammersmith
Brisk trade in high value houses while flat sales 'moribund'
A terraced house on Hammersmith Terrace went for £3,475,000. Picture: Move Market
The latest official figures suggest that a two tier market for homes in the Hammersmith area is emerging.
The Land Registry has reported just 55 sales so far for the third quarter of this year in the W6 postcode area. Although more transactions are likely to be added later, local agents agree that the market is quiet as in busier times the number of sales in a quarter has topped 200.
The reason for the decline in volumes seems to be mainly falling activity in the flats sector which makes up most of the area’s housing stock. Only 31 flats and maisonettes have been recorded as changing hands so far between July and September, a third of the normal amounts even in less active periods for the local market.
Trade in larger family houses, on the other hand, has been relatively brisk with five homes selling for £2,000,000 or over. The top priced property during the three months was on Hammersmith Terrace with one of the historic riverside houses selling for £4,575,000 having last changed hands in July 2015 for £3,650,000. Other high-priced sales during the quarter were of a terraced house in Hammersmith Grove which went for £3,465,000 and a semi-detached property on Stamford Brook Avenue which cost its new owners £3,333,000.
The relative strength in activity in the house market versus flats has led to a rise in the overall average for the W6 area up to £1,050,897. It is not clear whether there has been a rise in property prices on a like for like basis for houses as a small number of high value sales can distort the average. However, flat prices do appear to be weak with the average sale price of £551,992 the lowest recorded since 2014. A precipitous decline of nearly 40% compared with 3 years ago isn’t as alarming as it appears as the base period included sales of a number of exceptionally high-priced flats including many at Faulkner House. Over the last year, flat prices are down by a more modest 3.7%
The riverside view from the house sold on Hammersmith Terrace. Picture: Move Market
A practitioner in the local property sector said, “There is no denying that things are very quiet at the moment in terms of the number of individual transactions. A structural problem may be developing in which those who have bought new builds in the area are sitting on negative equity which is making it difficult for them to sell. This means that an active secondary market has yet to develop for many blocks. There are also lots of landlords with portfolios of property which they regard as a loose hold.
“There is strong yield support for local flat prices but without willing buyers and willing sellers the sales market in this sector looks set to remain moribund.”
| Hammersmith Property Prices - (July - September 2023) | ||||||||
|---|---|---|---|---|---|---|---|---|
| Area | Semi- Det |
Sales | Terraced | Sales | Flats/ Mais |
Sales | Overall Ave | Total Sales |
| W6 0 | 3333000 | 1 | 1374375 | 8 | 603375 | 8 | 1126765 | 17 |
| W6 7 | 0 | 0 | 2118000 | 5 | 406000 | 5 | 1262000 | 10 |
| W6 8 | 0 | 0 | 1325576 | 5 | 511219 | 8 | 824433 | 13 |
| W6 9 | 0 | 0 | 1828340 | 5 | 616500 | 10 | 1020447 | 15 |
| Total | 3333000 | 1 | 1624112 | 23 | 551992 | 31 | 1050897 | 55 |
| Last quarter | - | - | 33.7% | 9.5% | -15.8% | -22.5% | 22.0% | -11.3% |
| Last year | - | - | 9.7% | -42.5% | -3.7% | -60.8% | 9.5% | -56.0% |
| Last three years | - | - | 16.1% | -34.3% | -39.5% | -56.3% | -4.3% | -49.5% |
| Last five years | - | - | 16.5% | -14.8% | -40.0% | -58.7% | -0.4% | -47.1% |
| Last ten years | - | - | 36.5% | 21.1% | 22.1% | -13.9% | 25.4% | -6.8% |
As of September 2023, the average house price in the UK is £291,385 falling by 0.1% compared to the previous year according to the Land Registry. For London, the average was down by 1.1% to £537,000.
The more current Nationwide House Price index showed that average prices across the country were up slightly compared with October but down by 2% over last year.
Commenting on the figures, Robert Gardner, Nationwide's Chief Economist, said, “UK house prices rose by 0.2% in November, after taking account of seasonal effects. This was the third successive monthly increase and resulted in an improvement in the annual rate of house price growth from -3.3% in October, to -2.0%. While this remains weak, it is the strongest outturn for nine months.
“There has been a significant change in market expectations for the future path of Bank Rate in recent months which, if sustained, could provide much needed support for housing market activity.
“In mid-August, investors had expected the Bank of England to raise rates to a peak of around 6% and lower them only modestly (to c.4%) over the next five years. By the end of November, this had shifted to a view that rates have now peaked (at 5.25%) and that they will be lowered to around 3.5% in the years ahead.
“These shifts are important as they have led to a decline in the longer-term interest rates (swap rates) that underpin fixed rate mortgage pricing, as shown below. If sustained, this will help to ease the affordability pressures that have been stifling housing market activity in recent quarters, where the number of mortgage approvals for house purchases has been running at c.30% below pre-pandemic levels.
“While mortgage rates are unlikely to return to the lows prevailing in the aftermath of the pandemic, modestly lower borrowing costs, together with solid rates of income growth and weak/negative house price growth, should help underpin a modest rise in activity in the quarters ahead.
“Nevertheless, a rapid rebound still appears unlikely. Cost-of-living pressures are easing, with the rate of inflation now running below the rate of average wage growth, but consumer confidence remains weak, and surveyors continue to report subdued levels of new buyer enquiries.”
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December 4, 2023