Lockdown 'Killed Off' Wandsworth Property Market Recovery

House near common sold for just under £4,000,000 prior to outbreak

Property in Trinity Road went for nearly £4 million before lockdown. Picture: Google Streetview

June 24, 2020

Property prices in Wandsworth looked to have been performing well prior to the lockdown in March.

Figures for the first quarter of this year released by the Land Registry show that the average price in the SW18 postcode area was £771,345 up 2.1% compared to the same period last year.

Local agents believe that the market was in the process of launching a recovery after the uncertainty around the general election and would have been performing strongly now if the coronavirus hadn't hit.

Volumes remained low but there is an increasing view that there had already been a structural adjustment in the level of activity as regulatory and tax changes had squeezed out more speculative purchases but buying from long term owner occupiers remained relatively robust.

As has been the pattern for much of the recent past, large family houses still saw lots of buying interest. The top price paid so far this year was for a semi-detached property on Trinity Road just opposite Wandsworth Common which went for £3,950,000. Another semi-detached house on Lyford Road went for £2,900,000 at the beginning of the year.

Pent-up demand has meant that activity at the branches of agents in Wandsworth has picked up quickly but there is no consensus on whether or not this is sustainable and the grim economic backdrop might put pressure on house prices in the area. Generally local property experts seem to be stunned and confused about what is happening at the moment.

One local estate agent who preferred not to be named told us, “The structure of the property market is set to change fundamentally as the expectation of significant capital gains is slowly squeezed out of it. The government isn’t going to let prices fall much, because the financial system can’t take that, but there will also be a cap on the market as any stimulus measures will be unwound as soon as prices have recovered. My view is this means property prices will trade within a narrow band for perhaps a decade or even longer.

“This will have a number of effects. Firstly the notion of ‘getting on the property ladder’ is going to disappear and the choice between renting and buying will be less complicated. Secondly banks are going to be much less willing to give mortgages to people with low levels of equity unless the government is providing some extra support.

“I have sometimes recently felt obliged to suggest to people looking to buy if it is really in their best interest which I would previously have sacked a staff member for doing but now is the only really appropriate advice to give. There are still a lot of people who believe that because their parents bought a house and made a fortune from it they need to do the same thing and are consequently making bad choices.

“Another mindset that may need to change is the concept of an area being ‘up and coming’. I would be very wary of recommending someone commit to location which is substandard now on the basis that it is set to get better. There are roads where this is going to happen because of good quality development in the area or better public transport links but there are also some where the opposite is set to happen. Generally, the SW18 postcode area represents a good place to buy but some other parts of Wandsworth borough are being talked up as they have been for decades. Buyers should always bear in mind that if something seems relatively cheap there may be a good reason for the low price.”

Agents seem to agree that new build flat units closer to the river will hold their value better whereas those in secondary locations need to be treated with caution at the moment.

Property Prices in Wandsworth SW18 (January - March 2020)
Area Semi-det Sales Terraced Sales Flat/
Sales Overall average Total sales
SW18 1 1005000 1 1066667 6 527582 24 647322 31
SW18 2 1044999 2 1299224 8 511857 14 818741 24
SW18 3 2870000 3 854583 6 571111 18 889537 27
SW18 4 0 0 744417 6 441387 8 571257 14
SW18 5 1126500 3 1072917 12 508333 9 867896 24
Total 1676055 9 1033231 38 523480 73 771345 120
Change in quarter 21.5% -40.0% 4.2% -54.2% -8.7% -61.8% 4.4% -58.8%
Change in year -4.9% -30.8% 3.6% -40.6% -0.1% -46.3% 2.1% -44.4%
Change in three years -12.1% 12.5% 4.4% -40.6% -8.1% -55.5% 5.1% -49.6%
Change in five years 10.8% -10.0% 9.3% -43.3% 1.5% -69.5% 20.4% -62.3%
Change in ten years 61.5% -43.8% 64.8% -59.1% 38.4% -51.3% 47.3% -54.5%
Source: Land Registry

According to the Land Registry’s House Price Index, London was the best performing region of the country seeing a 4.7% rise in prices up to the end of March 2020. This brought the average price in the capital to £485,794. The rise for England was of 2.2% bringing the average property value to £248,271.

The Nationwide’s House Price Index showed a similar picture with a 3.7% annual growth rate for prices up until the end of April, the fastest since February 2017.

Commenting on the figures, Robert Gardner, Nationwide's Chief Economist, said, “In the opening months of 2020, before the pandemic struck the UK, the housing market had been steadily gathering momentum. Activity levels and price growth were edging up thanks to continued robust labour market conditions, low borrowing costs and a more stable political backdrop following the general election.

“But housing market activity is now grinding to a halt as a result of the measures implemented to control the spread of the virus, and where the government has recommended not entering into housing transactions during this period.”

He added that while the low level of transaction might mean it is difficult to calculate the index in the short term, “the raft of policies adopted to support the economy, including to protect businesses and jobs, to support peoples’ incomes and keep borrowing costs down, should set the stage for a rebound once the shock passes, and help limit long-term damage to the economy. “