Top end of market buoyant as demand for new flats disappears

One of the houses that sold for £3million. Picture: Google Street View

In the last quarter of 2017 the same number of houses sold for £3million in one Acton street as new flats in the whole of the W3 post code area.

Two detached properties on Perryn Road changed hands at that price according to the latest data released by the Land Registry. The figures also show just two new build properties sold which has increased further concerns about the inventory of unsold units in the area including at Acton Gardens and the Vida development near the A40.

The sales on Perryn Road achieved the second highest price ever for a residential property in W3.

Donald Collins sales director at Go View estate agents said, "Sales volumes are down across the Borough of Ealing, like they are across London. Evidently, the market is not swamped with an over-supply so I think it is a case we all need to re-adjust to this type of sophisticated market where you have a mixture of residential buyers and investors.

"The new build units below £600,000 have done well in the market mainly due to Government support with Help to Buy and I do think that this is unfair policy against homeowners, who need to sell to move up the ladder that their value is somewhat constrained as buyers have the option of help to buy in the market.

"I think a fairer policy would be offer Help to Buy to against all types of property, as opposed to creating the two tier market that is in operation at the moment.

"Against all this, there is still pent up demand in the area for the right property in the right location, and you should speak to a good local agent to help determine the best price possible in a timely fashion."

The average price of a home sold between October and December was just off the record high reached in the previous quarter at £635,751. However, if you exclude the Perryn Road sales then the level would be just over £580,000. In addition sales of houses generally have held up well with the number of transactions involving flats plummeting leading to the average rising so the 12.8% rise over the last year should not be seen as representative.

According to the Nationwide House Price Index, property values in London as a whole fell for the first time in eight years during 2017 down by half a percent. This made it the weakest performing region of the country for the first time since 2004.

Across the UK the price of the average home rose by 2.6% to £211,156 with low mortgage rates and healthy employment growth supporting price. However, prices were held back by mounting pressure on household incomes and declining consumer confidence. Demand from buy to let investors was also held back by stamp duty and tax changes during the year.

The RICS, the professional body for surveyors, is predicting a further though slight reduction in sales this year and further price declines in the London area. They are not expecting these to be significant because of the lack of supply.

RICS UK Market Survey has recently shown buyer enquires stalling, sales volumes stagnating and sentiment turning altogether more cautious as a result in the final quarter of the year. They say stock on estate agents books close to all-time lows.

Tarrant Parsons, RICS Economist, commented, "Following a pretty lacklustre finish to 2017, the indications are that momentum across the housing market will be lacking as 2018 gets underway. With several of the forces currently weighing on activity set to persist over the near term, it’s difficult to envisage a material step-up in impetus during the next twelve months. However, the fundamentals are not much changed from the end of 2017, so levels of activity should soften only marginally when compared to the year just ending. A real lack of stock coming onto the market remains one of the biggest challenges, while affordability constraints are increasingly curbing demand in some parts. Given these dynamics, price growth may fade to produce a virtually flat outturn for 2018.

"That said, despite the recent interest rate hike, mortgage rates are set to remain very favourable, with the prospect of further rises seemingly minimal over the coming year. Alongside this, government schemes such as help to buy should continue to provide some support to sales activity."

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March 15, 2018