Brexit uncertainty ignored to snap up flats with best views
A double-fronted detached house on Routh Road sold for £5.5million. Image: Google Streetview
In a market otherwise hampered by uncertainty over the Brexit issue, buyers in Wandsworth have still being showing interest in certain types of property which are generally in short supply.
The latest figures from the Land Registry show that there remains relatively strong buying interest in large family houses in the SW18 postcode area and anecdotally new flat developments in the area are seeing the units with the best views being snapped up.
The average price of a home in SW18 was £786,290 up by 4.8% although that overall rise masks a sharp fall of 12.6% in flat prices. It is the increased proportion of houses compared to flats which is driving the increase in the headline figure rather than a generalised rise in prices.
At the top end of the market five detached houses have sold in the final quarter of the year. The most expensive was in the Toastrack's Routh Road and was sold for £5,500,000, the second highest price ever recorded in the street. However, the same house sold for just over £100,000 more in September 2017.
Sales of semi-detached and terraced housing remains roughly unchanged in terms of volume from October to December 2018 according to the Land Registry, while sales of flats continued to show some signs of life Interest in new developments at the Ram Brewery, Riverside West and Mapleton Crescent resulted in 14 apartment sales in the last quarter of the year so far which wasn't too far behind the figure of 20 sales for the previous quarter.
Tom Bill, Partner and Head of London Residential Research at Knight Frank, said, "The influence of political uncertainty on the prime London property market has grown markedly in the last six months. In the first half of 2018 there were signs the market was beginning to rally as asking prices adjusted more fully to reflect higher transaction costs.
"However, with Brexit uncertainty persisting ahead of the UK’s planned departure from the EU, sales volumes in prime outer London were down by 10% year-on-year in January and the annual price decrease widened to 4.6%.
"Identifying individual factors affecting the performance of the prime London property market can be a complex task but the impact of political uncertainty was decisive during 2018. Indeed, economic sentiment indicators displayed a similar trend. The Lloyds business barometer began the year with a reading of 35% in January but had fallen to 17% by December.
"However, there are signs that pent-up demand is building. The number of new prospective buyers registering rose by 5% across prime London markets in 2018. Indeed, the ratio of new demand to new supply rose to 4.9 in the final quarter of 2018, the highest level in four years.
While it is unknown when the current level of political uncertainty will recede, the conditions for a recovery in the London property market appear to be taking shape.
However Lucy Pendleton, director of local agency James Pendleton, cautions against too much optimism in market sentiment, much of which she thinks is down to prospective buyers agreeing mortgage deals which they can pull out of "if Brexit goes bad and the economic outlook rapidly deteriorates". In Property Industry Eye this week she said, "The market is rattling around like a ricocheting bullet... in key areas low supply is squeezing those buyers who have a need, rather than just a desire, to move and just can't put it off much longer."
Above: Riverside West development
Foxtons estate agents in Wandsworth says that although the average sold price in Wandsworth has increased over the last four years, they report a decline of £48,000 on the more recent average price from the years 2017-2018.
Robert Gardner, Nationwide's Chief Economist, said, “Indicators of housing market activity, such as the number of property transactions and the number of mortgages approved for house purchase, have remained broadly stable in recent months, but forward-looking indicators had suggested some softening was likely.
“In particular, measures of consumer confidence weakened in December and surveyors reported a further fall in new buyer enquiries towards the end of 2018. While the number of properties coming onto the market also slowed, this doesn’t appear to have been enough to prevent a modest shift in the balance of demand and supply in favour of buyers in recent months.”
However Lucy Pendleton reported at the end of February this year that, "The market is falling in real terms but in the most expensive parts of the country, particularly London, it's going to take a more significant retreat in prices to pull first-time buyers to the table in significantly greater numbers."
The Bank of England’s Agents’ summary of business conditions for 2018 Q4 reported that along with low supply of houses, demand was also falling. Housing activity in southern England was muted due to uncertainty, with transactions postponed until after the EU withdrawal. The demand for new build houses remained stronger outside London, in part due to housebuilders offering more incentive to finalise sales.
The Royal Institution of Chartered Surveyors’ (RICS) UK Residential Market Survey for December 2018 reported that new buyer enquiries fell for the fifth month in a row. This fall in demand was accompanied by a lack of fresh stock coming into the market as the survey’s indicator on new instructions remained in negative territory for the sixth report in a row.
The UK Property Transactions Statistics for December 2018 showed that on a seasonally adjusted basis, the number of transactions on residential properties with a value of £40,000 or greater was 102,330. This is 3.6% higher than a year ago. Between November 2018 and December 2018, transactions fell by 0.1%.
The Bank of England’s Money and Credit latest release showed that mortgage approvals for house purchases (an indicator of future lending) were around 63,800 in December, unchanged from November, but slightly below their 2018 average of around 65,200.
UK house prices grew by 2.5% in the year to December 2018. This is the lowest annual growth for the UK since July 2013. London property prices fell marginally over the year with only the North East also seeing a decline.
If your agent is claiming to be marketing your property effectively and it doesn't appear on WandsworthSW18.com it may be time to choose a new agent.
The numbers below are subject to revision as is it usual that some properties are added late to the Land Registry's database.
Property Prices in Wandsworth SW18 (October - December 2018)
|Sales||Overall average||Total sales|
|Change in quarter||-||-||-1.1%||-25.0%||-6.4%||-18.3%||10.7%||-43.5%||12.3%||-34.7%|
|Change in year||-||-||22.1%||87.5%||-1.3%||10.1%||-12.6%||-14.1%||4.8%||-2.1%|
|Change in three years||-||-||-24.8%||25.0%||-7.6%||-29.0%||-15.7%||-59.1%||-0.6%||-48.8%|
|Change in five years||-||-||-3.8%||-16.7%||20.2%||-33.9%||15.9%||-71.1%||39.1%||-61.5%|
|Change in ten years||-||-||98.3%||200.0%||101.1%||117.1%||66.9%||18.6%||103.5%||47.4%|
Copyright notice: All figures in this article are based on data released by the Land Registry(© Crown copyright 2018). The numbers are derived from analysis performed by wandsworthsw18.com. Any use of these numbers should jointly attribute the Land Registry and wandsworthsw18.com.March 13, 2019