Has Demand Dried Up for Hammersmith's Riverside Apartments?

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Sales grind to a halt and prices plunge in early months of 2016

The average property price in W6 during the first three months of 2016 was £901,862 - down by 10.8% compared to the same period in 2015, when the average soared above the million mark to £1,011,362.In both quarters, sales of flats were the key factor.

During the first three months of 2015, no detached or semi detached houses were sold. In the first quarter of 2016, the top of the market was only slightly livelier with no detached and just three semi-detached house sales.

And while slightly fewer terraced houses were sold - 22 in this quarter compared with 29 last year - prices have remained stable, with a tiny rise of just 1% over the year to reach £1,351,275.

When it comes to flats however, the picture is very different, with the average price dropping by a precipitous 35.6% over the year to £579,326 and the overall volume of sales almost halving from 85 a year ago to 44.

The reduction in sales is mainly concentrated in one postcode zone, W6 9, the area around the riverside which houses upmarket developments Queen's Wharf and Fulham Reach.

At the start of 2015, sales at these developments were booming, with 35 apartments changing hands in the area for an average price of £1,409,660.

Sales remained brisk during the last quarter of 2015, with 29 apartments sold in the area and an average price of £1,017,250.

By contrast, at the start of this year, this flood appears to have dried up with just four flats sold in this area and the average price slumping to £903,750.

Of course, the cold dark months between January and March are always a slow time for the property market.

With two and three bed apartments at Fulham Reach still available with prices ranging from £1,229,950 to £4,999,950, and apartments at Queens Wharf selling for £715,000 for one bedroom to £4,200,000 for a three bedroom penthouse, developers St George and Mount Anvil must be crossing their fingers and hoping that well-off buyers will be back this spring and summer.

The Land Registry’s March data for London shows a 13.9% rise over the last year to £534,785. This is higher than any other part of the country and makes London average twice the average for any other part of the country including the South East.

Annual growth of 6.7% in March brings the average house price in England and Wales to £189,901.

The latest survey by the Royal Institution of Chartered Surveyors (RICS) has revealed that growth in the private and public housing sectors in London slowed down considerably. Private housing workloads rose at their slowest pace since Q4 2012, with only 20% more of those working in the sector reporting a rise in activity rather than a fall over the first quarter of 2016. During the last quarter of 2015 that figure was 44 per cent.

This easing in the private housing sector has not been offset by any increase in the construction of public housing, with growth in this sector remaining broadly unchanged from the previous quarter, and just 11% more surveyors reporting a rise rather than a fall in activity.

RICS Chief Economist, Simon Rubinsohn said:"On the surface, it might seem surprising that we are witnessing a slowdown in the construction sector just a few months after hearing the Chancellor’s ‘We Are The Builders’ speech, given the Government’s significant commitment to this sector. One might well ask why growth in private housing workloads is softening at a time when policy is firmly focussed on the creation of new starter homes. We have long held the view that starter homes cannot be the only solution. There is an issue around the availability of land on which new houses can be built, and we would like to see more being done to free up private brownfield sites.

"Our survey tells us that planning delays are one of the biggest barriers to growth in the construction sector. We have recommended that councils work together to create a team of emergency planners who can parachute into boroughs that are experiencing significant delays, therefore reducing a major growth barrier.

"That said, we cannot discount the climate of uncertainty caused by the forthcoming EU referendum. We know that a range of sectors have been affected by these issues as investors look to delay."

Hammersmith Property Prices (January - March 2016)
Area	Semi- detached	Sales	Terrace	Sales	Flat/ mais	Sales	Overall Ave	Overall Sales
W6 0	2121250	2	1319544	8	546660	21	847700	31
W6 7	0	0	2117500	4	586056	9	1057269	13
W6 8	0	0	1017087	8	483286	7	767980	15
W6 9	1800000	1	1282500	2	903750	4	1140000	7
Total	2014167	3	1351275	22	579326	41	901862	66
Last quarter	-24.0%	50.0%	-1.6%	-8.3%	-18.2%	-47.4%	-1.7%	-37.1%
Last year	-	-	1.0%	-24.1%	-35.6%	-51.8%	-10.8%	-42.1%
Last three years			35.4%	-8.3%	40.7%	-6.8%	45.8%	-2.9%
Last five years	94.2%	0.0%	65.2%	-33.3%	74.3%	-24.1%	68.9%	-26.7%
Last ten years	256.9%	0.0%	125.1%	-53.2%	129.3%	-61.3%	138.2%	-58.0%

Source: Land Registry

May 27, 2016