Volumes recover but price increases remain patchy

The latest official figures on the local property market are showing a significant level of recovery. Prices are now down less than 10% from the levels seen this time last year and volumes in the market have recovered sharply from the historic lows seen earlier in the year.

The average home in the SW15 area in the third quarter of this year cost £467,801 down by 8.5% compared to the same period last year. This represents a small rise from the levels of three years ago and a 33% increase from five years ago.

Volumes still remain at half the levels seen when the market was at its most active and there is some cause for caution on prices as the recovery appears to be uneven. Larger properties saw a bigger pick up in transaction levels than flats and this in itself will have played a part in boosting the average. Taken in isolation the prices of terraced houses and flats in the area are still down sharply compared to a year ago.

London's annual house price change to the end of September according to the Land Registry is -3.2 %, which is the sixth month in a row in which London's rate of fall has eased. The average value of a property in London is now £314,954.

The picture has, according to Luke Bennett, Director of SW15 Estate Agents on Upper Richmond Road, actually been getting rosier since the spring :
“The stories in the media are generally driven by statistics such as mortgage approvals and land registry figures, but they tend to be a few months behind the actual market.”

“We have seen the market improving quite dramatically every month since Easter. Our level of business is very healthy, but more importantly the actual value of property has been recovering at an impressive rate, vastly more than I could have expected at the beginning of the year.”

Luke estimates that prices dropped by about 20% in the most popular areas of Putney, and that ex-council properties and homes further away from public transport fell by as much as 25%. But he claims that areas such as Wandsworth, Fulham, and Barnes have fared even worse, with prices dropping by as much as 30%.

The recovery has been driven by three things, says Luke: the “ultra-low” supply of houses, cheap deals being offered by lenders to people with sizeable deposits and returning confidence among city workers, many of whom buy property in Putney.

“The cream of the crop is now not far from 6% to 8% away from its peak value but the less desirable properties are still a good 10% or 12% away,” he added.

Right Move's House Price index, which is based on offered prices rather than sales prices, is showing that in October in London prices were back to an all-time high. The majority of buyers are expecting more rises and only 1 in 10 expecting falls

The Land Registry figures for England and Wales as a whole in September show an annual movement of -5.6%. This brings the average house price in England and Wales to £158,377. This is the fifth month in a row where the annual rate of decline has eased.

The latest survey of Chartered Surveyors for the RICS also shows the market recovering with London appearing to be the strongest area.

Jeremy Leaf, a spokesperson for the RICS said, " Although the supply of property is beginning to pick-up, it is still insufficient to keep pace with the increase in demand which points to further prices gains in the near term. Cheap money remains a critical prop for the market and this is being reflected in the continuing appetite for finance from first-time buyers despite the large deposits still being demanded by lenders."

The numbers below are subject to revision as is it usual that some properties are added late to the Land Registry's database.

Putney Property Prices - July - September 2009

Copyright notice: All figures in this article are based on data released by the Land Registry. The numbers are derived from analysis performed by PutneySW15.com. Any use of these numbers should jointly attribute the Land Registry and PutneySW15.com.

December 7, 2009