|Has Fulham's Property Boom Ground to a Halt?|
Prices stall in summer following a strong bounce in spring
The seeming relentless rise in Fulham property prices came to a halt during the summer months, with prices of both terraced houses and flats and maisonettes showing a small fall.
This slight reverse, however came in the wake of a strong bounce back in the spring which saw the average price jump by 14.4% to rise above one million pounds.
This time, the average slipped by 3.3%, down from £1,130,841 to £1,093,700.
Flats and maisonettes fell by a larger 6.2% from £85,028 between April and June £803,962 but again this followed a spectacular rise in the average during the previous quarter of 21.8%.
It was also not consistent across the whole of Fulham, with prices showing a drop in three postcode areas, SW6 2, 4 and 5 but rising in the other four, with prices in SW6 1 and 3 jumping above the million mark.
The average price of flats and maisonettes is of course strongly affected by new developments in the area - SW6 1 for example, contains high end developments such as Lillie Square and The Landau in Farm Lane, where prices begin at £895,000.
Terraced houses fell by a tiny 0.3% from £1,719,318 to £1,713,408 but the silver lining for local estate agents was that the volume of sales was up by 77 in spring to 89.
In fact total sales were up from 270 to 307, with only the very top of the market remaining slow. Only three semi-detached houses were sold during the period, for an average £3,466,667. The highest priced fetched during summer, meanwhile was for a six bedrooom house in Chipstead Street on the Peterborough estate which changed hands for £4,750,000.
Despite prices appearing to tread water in the summer, Peter Rollings of Marsh and Parsons expects further rises in months ahead in "outer prime" areas such as Fulham as Central London become ever less affordable. " Buyers will be prepared to pay top dollar for properties in outer prime areas, " he says. " It's a fact of geography that however much we try, London supply will always be limited and with that in mind, prices will continue to rise."
The September figures from the Land Registry’s Market Trend data survey show that London remains the country’s best performing area in terms of residential property price rises. The average price in the capital is now just short of half a million at £499,997 up by 9.6% over the last year. The average property value in England and Wales rose by 5.3% to £186,553. Monthly house prices up 1.0 per cent since August 2015.
The number of completed house sales in England and Wales decreased by 4% to 81,696 compared with 84,691 in July 2014. The number of properties sold in England and Wales for over £1 million in July 2015 decreased by 9% to 1,413 from 1,555 a year earlier. Repossessions in England and Wales decreased by 50 per cent to 471 compared with 943 in July 2014 with only 36 taking place in London during the month.
In October, 25% more chartered surveyors in London saw house prices rise according to the latest RICS UK Residential Market Survey, compared to a balance of 26% more in September, showing a steady increase month-on-month.
However, only 5% more chartered surveyors are expecting a rise in prices in the capital over the next three months – this is the lowest reading across the UK over this time period. Despite this, the twelve month view for the capital is still relatively strong with 53% more respondents expecting prices to increase.
Demand from potential buyers grew modestly across London in October with 7% more respondents seeing a rise in new buyer enquiries. Demand continues to considerably outpace supply and the number of new instructions decreased for the ninth month in succession, with 9% more chartered surveyors reporting a fall, contributing to the rise in prices in the capital. The supply of new listings to the UK market as a whole has been in decline since the start of the 2015 with a decrease in new instructions in London every month this year.
In the London lettings market, demand increased at broadly similar pace to that of supply in the three months to October, as new landlord instructions rose at the quickest quarterly pace since early 2014. Nevertheless, rental expectations remain strong and respondents continue to expect rents to rise over the year ahead. Rental growth in the London is anticipated to accelerate to an average of around 4.5% per year over the coming five years.
Simon Rubinsohn, RICS Chief Economist, commented, “It is hard to get away from the issue of supply when it comes to the current state of the housing market. The legacy of the drop in new build following the onset of the global financial crisis is now really hitting home with both the sales and letting markets continuing to show demand outstripping supply on a month by month basis. And if the five year projections from members regarding the outlook for both prices and rents is anything to go by, property is set to become even more unaffordable going forward making the governments focus of boosting to delivery of new homes absolutely critical.”
Changes to the tax regime have also had an impact in the top end of the market with the turnover of larger family houses in the area falling.
Adrian Gill, director of Reeds Rains and Your Move estate agents, said, “The Chancellor’s intimidating Stamp Duty remodel is still spooking the top end of the London market. Properties worth over £1.5 million have been hit with a stamp duty increase, currently set at 12% of the portion of the property’s value above £1.5m, up from 5% previously. As a result, sales of homes worth more than £1.5 million have fallen by 35% in Q3, compared to a year ago. This tax has really put the shackles on the prime market in the capital, as three quarters of these sales since January 2014 took place in London. “
A detailed listing of properties sold recently in the area will be appearing in a forthcoming edition of the Fulham newsletter.
November 20, 2015