We have all heard about the property prices in London taking a nose dive. Well, we are not in London, but it is worth a having some idea of what is happening in the capital. It may or may not affect the rest of the country, of course we hope it does not. However, since the causes of this decline are somewhat applicable across the country, we are likely to see similar trends here in the North West.
In London it is the prime property markets which are hit the hardest. The properties in the capital’s 52 most expensive postcodes have seen average reductions of 9%. In Knightsbridge these reductions are an average of 12.1%, equating to a £927,188 average reduction. More than 50% of the houses in these locations have been on the market for 6 months or more. Jonathan Hopper from Garrington Property Finders commented: “Acute sensitivity among buyers continues to force sellers to reduce their expectations, and in the most expensive areas this is throwing up some striking discounts.”
Experts seem to believe this decline is not due to Brexit, but more to do with an increase in the highest rates of stamp duty and the increased base rate of 0.5%.
Across the country we are seeing the lowest number of mortgage approvals since 2013! Only 36,115 approvals were recorded in December 2017, downs from 44,476 in December 2016. UK Finance said, “housing market activity has been under pressure from squeezed consumer finances and fragile confidence.”
The Royal Institute of Chartered Surveyors have recorded declining numbers of new-buyer enquires and agreed sales. Their statement said: “The bank’s Monetary Policy Committee has seriously misjudged the ability of the housing market to withstand even modest increases in interest rates.” Nationwide Building Society showed price growth of just 2.6% in December, reduced from 4.5% in December 2016.
New data recorded by HM Land Registry in England and Wales shows the number of property transactions has fallen ‘9.8% to 866,684 transactions in year ending June 2017, from 961,048 in the previous year. This is the lowest number recorded since year ending June 2013, when 686,961 transactions were recorded’ (HM Land Registry in England and Wales).
On the ground here in Altrincham we have noticed a dramatic change in levels of buyer activity inline with the above statistics. In October properties were flying off the market as soon they were listed, a three-bed semi would attract 20-30 viewings in week one; while now we are seeing the same house attract only 5-10 viewings! Buyers are far more price sensitive and a slight reduction can make a significant difference to interest levels. We of course hope this is a short-lived trend and assume activity levels will pick up as the year progresses. But we see property prices locally stabilizing this year, we feel it highly unlikely a decline will be seen in such a healthy market and the rate of increase in recent years was clearly unsustainable.