Safe as Houses

Nick Churton of our London Mayfair Global Network gauges the effect that the Election result will have on the residential property market.

For several weeks leading up to the 2015 general election houses didn’t seem as safe as they might be.

Across the country, house buying and selling activity stalled as people awaited the result. 

So the announcement that there would be a winner with a clear if perhaps only slender majority was met by those in the housing industry with a collective sigh of relief.

It wasn’t necessarily the political stripe of the party that won but the fact there was at least a clear result and the property market would not be left in limbo during weeks and possibly months of political horse-trading and in-fighting.

Also, there will be an acknowledgement that the threat of mansion tax has gone. This was a significant concern towards the upper end of the market. Another worry was the threat of rent control. This would potentially have affected the buy-to-let market dramatically.

So there is a mandate from the electorate. The city has responded favourably. The pound is up; shares in major house building firms are up and at least 37% of the population feel a little more confident about the immediate future – buoyed by a trend of improving trade, employment and cost of living figures. But let us all hope - no matter which party we supported – that the next government, besides dealing with a small majority, a large deficit, Europe, devolution, world hot spots and many other incredibly important issues, will at last get to grips with an effective and sustainable housing policy in the UK. It will not be before time.

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Voting With Their Feet

Nick Churton of our London Mayfair Global Network gauges the impact housing polices have had on public opinion in the lead up to the general election.

Four weeks before the 2015 general election the voters had already made their thoughts known. Or at least those who had anything to do with buying property had. The political parties had been trying hard to woo the electorate with a plethora of housing-related inducements. But did they really mean anything to anyone?

The Conservatives promised huge numbers of new homes would be built and also dangled a right-to-buy opportunity for those with shared ownership arrangements through housing associations. Labour had been pinning their hopes on the popularity - with those who would never have to pay it - of a mansion tax. Also of rent control.

Had either party the right answer to excite the electorate? It seems not. In the heat of electioneering it appeared that the only thing which significantly made buyers more active during the campaign was sunshine. The minute the spring sun came out so did buyers. Almost immediately viewings were up, offers were up and sales were up. What did this mean? It seems that the weather was more influential on buyers than the political climate.

Successive governments haven’t exactly won people’s respect on housing. The coalition has had four housing ministers during its recent tenure, and, between 1997 and 2008 the previous Labour government elevated eight different ministers to the post. This is hardly good for long-term stability in the sector. So we have all come to learn that if we want something done about roofs over our heads we must do it for ourselves.

Simply put, the economy in general seems more immediately important to voters than housing in isolation – and with good reason. When the economy is up people feel better and can afford more things – like properties. If it’s down everyone hunkers down and goes nowhere: demand drops, values drop and new home building decreases which leads to a drop in land values – no matter what the housing policy at the time. Housing depends on the economy. The electorate understands that. It is people who create demand once the means to buy is in their favour and no right-to-buy or mansion tax policies will change that.

The past fifty years have not led us to believe that the next five will be any better for government housing policies – especially if the ministerial door remains revolving. So we are on our own. Perhaps the next government should just neatly put all these polices under another title - devolution.

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April Showers

Nick Churton of our London Mayfair Global Network looks at the market as we head towards the Easter weekend, the spring market and a General Election.

The property market can sometimes seem a bit like the weather. Some days it is fine and sometimes it is rainy. But some days it really does not know what it is doing. The market is a bit like that at the moment. Just when it looks as if there is no momentum there is a surge of interest and then as quickly as it comes it stops - just like an April shower.

So in this pre-general election period buyers and sellers seem to lurch between wanting to do something but at the same time worrying about doing it. It is almost as if they know that there are so many factors are in place that make buying a new home favourable but that there are others which could in the future weigh against such a big decision.

So the answer for some seems to be not to do anything at all. But for many that is not the answer. Parents with young children may need to move before the autumn term for schooling reasons – or rather good-schooling reasons. Then there are the work-related movers and those whose lives have reached a stage where selling and/or buying is a matter of necessity rather than choice.

But it is hard to think of a period in the past seven or eight years when there has been a better time to be propelled into a sale or purchase. With low interest rates and others holding back for many this will be a good time to make a move. You probably won’t pick up a bargain. It is a hard truth but bargains are seldom to be found in property – would you sell your home at a bargain price? - and this is particularly so at the moment when there are fewer properties on the market than for several years.

So if you are going to buy or sell in the coming months when the weather in the property market seems fickle, as long as you take some sensible precautions – just like wearing a mac or taking an umbrella in changeable weather - there is no real reason to get wet. In fact by the time all the others come out from wherever they have been sheltering you will be home and dry.

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March Market Update - Christies House Price Index - Local property prices have already increased this year

The latest Christies House Price Index, uses the most up to date reliable data from the Land Registry, and also confirms that property in the local area continues to represent an outstanding investment.

Local property prices increased by at least 19% in 2014 and continue to rise in 2015. Medium and long term gains are even more exceptional. 

Based on past performance potential buyers will be very encouraged to see that prices have risen by 34% over the previous five years, by 41% over the previous ten years and by an astonishing 145% over the previous 15 years.

What is perhaps even more impressive is that prices are now also 17% higher than at the previous peak of the market in early 2008.

The comparison is based on the average price of all local properties sold including flats, maisonettes, all types of houses and bungalows. Figures for March onwards are not yet available - the Index will be revised as soon as the data is released so please check this page regularly for any updates.

Date..............Average Price.........Average Price Feb 2015.......YEARS............INCREASE

Feb-00..............£129,516.........................£317,456.....................15....................145%Feb-05..............£225,668.........................£317,456.....................10.....................41%Feb-10..............£236,242.........................£317,456......................5......................34%

In recent times, demand for properties in Cheam, North Cheam, Sutton, Stonecot Hill, Carshalton, Worcester Park, Ewell, Epsom & Banstead  and surrounding towns and villages has increased dramatically. Much of this demand is due to the extremely popular local schools which are nationally renowned and attract large numbers of enquiries, ensuring that property sale levels and prices have remained well above quoted national averages.

Buyers also flood into the area to take advantage of a wide range of leisure and shopping amenities. Flourishing local communities offer popular cafés, restaurants and varied independent shops and businesses coupled with many high street names, creating an enviable mix of retail and food outlets.

These combine with excellent road and rail links, to ensure demand for property remains constant and represents an exceptional investment.

Christies have an unparalleled understanding of the locality and are dedicated to ensuring customers are always informed – not just on the property market and prices, but also the wider area and amenities. 

For example, the location of the properties we sell, are ideally situated on the fringes of London, bordering rural Surrey greenbelt countryside with picture postcard villages and market towns full of rich heritage and character.

When looking at buying a new home, we believe it is imperative that our purchasers are fully informed about all aspects of the potential move.

Your estate agent should be able to answer any of your questions regarding this. We are proud to represent this area and convey that passion to anyone looking to move here.

Please contact us on 020 8643 7777 or email at sales@christiesworld.com

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Budget Comment 2015 – Bottoms Up

Nick Churton of our London Mayfair Global Network looks at the key property related feature in this year’s budget.

The property market is like a building. It is built from the bottom up. Good foundations underpin the market just as they do a fine building.

Much nonsense is spoken about the market being driven by the wealthy. In fact it is driven by the needy – those people who simply need a roof over their head rather than desiring a better home for extra convenience or social status.

The two central piles of good property market foundations are affordability and confidence. Chancellor George Osborne sought to further strengthen these in this year’s Budget speech.

The most important Budget feature for the property market is a Help to Buy ISA which will act as a 25% top-up on deposits. The government will add £50 to every £200 that an intending home buyer saves in one of these new ISAs. George Osborne said the new scheme could be used by a first-time buyer needing a 10% deposit of £15,000. Therefore a buyer now only needs to save £12,000 as the Government will top up the amount by £3,000. The chancellor said, “A 25% top-up is equivalent to saving for a deposit from your pre-tax income – it’s effectively a tax cut for first-time buyers.”

The scheme will be available on properties worth up to £450,000 in London and up to £250,000 outside the capital. It can also be used by couples buying a home together, potentially doubling the government’s contribution to the scheme which should be launched this autumn.

For deposit-strapped first time buyers this is a welcome and timely boost. It should accelerate the speed in which they can get into the market by shortening the period they have to spend in saving for a deposit. This is important at a time when in many areas house price inflation has outpaced wage inflation.

So confidence in the economy is growing. Unemployment is falling. Some are beginning to see their wages rise ahead of inflation and interest rates are at an all time low. Hand in hand with this confidence boost is growing affordability. Buying a home will for many now be a cheaper option than renting. So far so good: but what we need now is some more stock for these aspirational purchasers to buy! Property is never all Champagne and roses. But at least some first time buyers can now crack open the fizz.

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Christies Network Auctions: £5.4 million raised in March sale

Christies Network Auctions held our two day March sale at our new venue of the Grosvenor House on London’s Park Lane on March 3rd with the second day at Birmingham City FC in conjunction with Pennycuick Collins on March 11th.

The March sale saw a record number of legal packs downloaded and both days drew large attendances (over 300 people) with standing room only during the sales. This was a clear indication of the successful growth of auctions as a method of sale.

There was lively bidding on both days but there were also some signs of investors showing increasing caution as a number of lots fell short of the reserve prices set. Auctions are always a clear barometer of market sentiment and the sale demonstrated a clear gap between many sellers expectations and buyer’s reality and the need for realistic reserve prices.

In total, an impressive £5.4 million of property, including residential, commercial and land was sold over the two days.

Auctioneer Guy Charrison entertained the audience in London in between lots with anecdotes and interesting trivia and worked hard from the rostrum to deal with bids that were being made in the room, by proxy, by telephone and over the internet.

Stuart Tullah was at the rostrum in Birmingham and oversaw a successful day including the remarkable sale of lot 57 which was a house with a short (eleven year) lease which had a guide price of £30,000 and ended up selling some 336% higher at £101,000.

Network Auctions Managing Director Toby Limbrick said: “We were delighted with our new venue at the Grosvenor House and the large turnout for both days demonstrated a keen interest from investors, institutions and the public at large. To have a number of lots fall just short of reserve was obviously disappointing but we are certain that several deals will be arranged post auction as sellers can be confident that, having tested the market in the room, the price they achieve is a good one."

“Historically the property market shows signs of slowing due to uncertainty before a General Election but the auction market remains more robust and this is borne out by the amount of interest in our next auction sale in May.”
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Christies Network Auctions’ next sale is another two day event with the London auction coinciding with the General Election on Thursday 7th May and the Birmingham auction taking place on May 13th.

The catalogue for the May sale is now open and, having invited lots for inclusion, the size of the catalogue is growing fast. If you are considering selling, please contact Jeremy Richardson of Christies Network Auctions on 020 8643 7777 or at sales@christiesworld.com who will be delighted to discuss the best approach for your property.

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Voting Intentions

Nick Churton of our London Mayfair Global Network takes a very personal view on moving home in this time of political and economic uncertainty.

Which way will you vote? Will you vote to move home before or after the election?

All decisions have consequences. And all big decisions have big consequences. Buying and selling property is certainly a big decision. Answers to questions like this are best made on the basis of what you know.

So what do we know? We know that Britain is a nation of homeowners, that we have the lowest interest rates ever and lenders have entered a mortgage rate war, bringing some incredible deals to the market. We know that as salaries rise so does the affordability to move home and that it is now often cheaper to buy a property than to rent one. We know that we are more optimistic about the economic future - and therefore our own financial futures - than we have been since 2008. Finally we know that property stock levels are the lowest for many years and while that should put upward pressure on prices it hasn’t because of what we don’t know.

We don’t know who will be in 10 Downing Street after May 7th. So we don’t know what sort of country we will be living in following the election. We don’t know how far the current improvement in the economy will take us, nor the effect that the three headed monster crisis of Euro Zone, the Ukraine and the Middle East will have over time. Nor do we know how much a mansion tax would affect the UK property market. It would also be helpful if we knew how long our current low interest rates will prevail. But we don’t.

One thing estate agents have always known is that many fewer people would move if residential properties were simply viewed as commodities. But residential properties are not commodities they are homes and, despite what is going on in the world, at the heart of our lives and our families are our homes. They are not a speculation they are a human necessity.

If your voting intention to move is clouded by indecision you are not alone. But in my view one thing is certain; home trumps the UK economy, current affairs, ‘dodgy’ politicians, terrorists, tax evaders, devolution and the oil industry. Home is where the heart is and if this is the right time to find a new home then now is the right time to move – despite what is going on in the rest of the world or who might be grinning broadly at us from the steps of Number 10 on 8th May.

Please contact us on 020 8643 7777 or email at sales@christiesworld.com

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