Buyers' strike for new build flats but agent hopes for Brexit resolution bounce

Detached house in Colinette Road sold for over £5mn

Although the volume of sales in the local property market continue to be at historically low levels, there is still strong buying interest for larger properties on the more desirable streets in Putney and Roehampton.

The latest sales figures from the Land Registry show that the average price of a home in the SW15 post code area rose by 10.9% over the last year, well above the national average. However, this rise was almost entirely due to a bigger proportion of detached and semi-detached houses being sold during the period with demand for terraced properties and flats relatively muted.

The top end of the market appears to be more buoyant with five properties sold for over £3million between July and September. These include two detached properties in the Roehampton area and an eight bedroom home in Colinette Road which went for £5.1million.

One semi-detached 5 bedroom home on Dryburgh Road was sold for £3million. This house was listed for sale in February at £3,295,000, ten years earlier it changed owners for £2.8million, having previously achieved a sale at £1.8million in July 2001.

Smaller houses in the area did not fare so well with terraced houses seeing a double digit decline in prices over the last year. Over the last decade this type of property has now only risen by 18.8% on average much lower than the level seen in other sectors.

According to the Land Registry there were only 2 new build flats and maisonettes sold in the third quarter, yet more flats are being built and marketed in the area, especially on the Upper Richmond Road between the High Street and East Putney tube station. The secondary market for flats also appears to be very quiet with the volume of sales in the latest quarter struggling to reach the historically low levels seen earlier in the year.

Allan Fuller of Allan Fuller Ltd estate agents commented, "It can hardly be a surprise that property sales have slowed when the media is so full of Brexit uncertainty. With our politicians in open conflict citing dire consequences no wonder people are concerned about taking major financial decisions. "

The neighbouring SW18 post code has seen a much higher level of activity in the market for new build flats with 20 new build sales reported during the same period, nine of which were in Draper's Yard in the Ram Quarter. This contrast in volume may be because the rate of stamp duty rises quite sharply over £500,000 and relatively few flats in Putney are now priced below this level particularly not new builds.

Allan adds, "The really intriguing figures are the increase in property values over the last ten years, with an overall average of a 70.6% increase. I have always said that if one does look at property in any ten year cycle overall there will be an increase. This is despite fluctuations that may well include times when values drop. The table below shows an increase locally of 70.6% over the last 10 years proving my point conclusively."

"So is the current cloud gloom over property a reason not to buy? I don’t think so given that history proves values will increase substantially over time. There is a growing body of opinion that when we do know the result of Brexit negotiations property could well have a Brexit Bounce because people who need and want to move but have been holding back will simply say that they will have to get on with their lives. So 2019 could well see a substantial increase in property transactions and values rise again".



The latest figures from the Nationwide’s House Price Index show that prices nationally have continued to rise slowly with the average sale price now £214,534 up by 1.6% over the year.

Commenting on the figures, Robert Gardner, Nationwide's Chief Economist, said, “Looking further ahead, much will depend on how broader economic conditions evolve. If the uncertainty lifts in the months ahead, there is scope for activity to pick-up
throughout next year. The squeeze on household incomes is already moderating and policymakers have signalled that interest rates are only expected to raise at a modest pace and to a limited extent in the years ahead.”

The October 2018 RICS UK Residential Market Survey results show the recent softening in new buyer demand beginning to feed into a slightly negative trend for national house prices in the view of the surveyors’ industry body.

The report says, “A sustained softening in demand over recent months has likely driven the weaker price trends in parts of the country. The net balance for new buyer enquiries ticked down to -14% in October (compared with -12% last month), marking three successive reports in which headline demand has deteriorated. Affordability pressures, political uncertainty and a lack of fresh stock coming onto the market all continue to hinder activity to varying degrees.”

The report adds that new instructions to surveyors continue to fall meaning stock levels remain close to all-time lows and rendering any chance of a meaningful turnaround in the near future unlikely. A net balance of 30% of respondents reported the level of appraisals being undertaken to be down on an annual comparison.

Looking ahead, respondents in London and the South East were the most negative with price falls expected over the next twelve months.

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.

November 22, 2018