Rose tinted spectacles?

Written by Peter Rollings

Thursday, 23 July 2009

London_property_blog_rose_tinted_glassesI read an article on Tuesday this week in the Telegraph, in which the writer was of the view that property professionals who saw improvements in the housing market were wearing “rose tinted spectacles.” Neither he nor I can actually predict what is going to happen to the property market in the coming months but I wanted to share how Marsh & Parsons is currently experiencing the market in London. Firstly, it’s obviously nonsense to depict the entire UK housing market as one entity. It’s made up of many micro markets with specific conditions. The fact remains that buyers continue to enter the market in great numbers. Sales are being agreed most within 4% of the asking price, some in excess of the asking price and although mortgages are still hard to come by, prices in some specific areas of the capital have actually returned to where they were at the height of the boom. This is because of one fundamental – lack of available stock. It may sound crazy but it is true all the same.*

 

More generally, I believe the market will fluctuate as markets usually do, with some areas being more in demand than others. There has been a large influx of overseas money into London from a wide variety of sources. Let’s not forget, London is still a ‘World City’ and continues to be viewed as a politically stable safe haven with a strong currency and a mature real estate market providing excellent choice and proven long term growth.

Consequently, I would like to predict that prices in Central London will not fall further however, I do not make this claim for areas of the UK where there is a gross over-supply of unwanted one and two bedroom flats. Already we are seeing the start of a new era of house builders buying residential building land to build houses rather than residential ‘boxes’. We aren’t going to see any big improvements this year and these small changes – up or down - will continue for another six months.

* The Primelocation Price Index has reported that Prime London sales stock levels have fallen for the second successive month with a slight increase in Prime London sales values.

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Rose tints
written by David Clark, July 24, 2009
Definitely not rose tinted - my experience of the rural East Cambs Market (Ely) is that the 'Roses' in our Market ie right price, right location and right condition are finding buyers very quickly. We are going to offers on an Edwardian 3 bed semi next week after 40 plus viewings in 2 weeks!!
view from afar
written by Ted Hanson, July 27, 2009
Interesting comments Peter! We are seeing similar trends in Australia where buyers are experiencing record low interest rates and mortgage repayment rates in some areas LOWER than rents. Investors will be the next big thing
Glass half full?
written by Henry Pryor, July 28, 2009
We may have to agree to differ. I accept that there are exceptions but today's Land Registry figures confirm that the number of sales in April were down 50% in London on last year (in turn 42% down on April 2007). Prices, say the Land Registry, in Ken & Chelsea are down 15% over the year. We all know that one can make statistics say whatever one wants but for what it's worth, here are the numbers for June http://web.me.com/henry.pryor/...-2009.html. We may continue to disagree (which is always a pleasure, Peter) but whilst M&P clients will continue to buck the trend thanks to the excellent advice that they receive there's no point vendors thinking that the storm is past and that values or transaction levels are back to pre-crash levels.
Is there any other way?
written by Peter Rollings, July 28, 2009
As usual a well thought out and reasoned response, HOWEVER I am referring to prices not falling, not volumes increasing. Volumes will only increase when the mortgage market opens for 'general' business which I would hope will be early next year. The land registry figures for London were up in the month by 2% against a national figure of 0.1%-- as i said, there is more than one 'property market'!
London Property Prices and Wages
written by Grant Nicholls, July 29, 2009
Hi Peter,

I am in full agreement with you that the London Property Market has most probably bottomed out.

This is most probably due to the fact that London is a "World City" and that London property prices, in relation to wages, did appear cheap in comparison to other areas of the country.

Kind Regards,

Grant Nicholls
Monument London Realty Ltd
"The London Home Search & Relocation Specialist"
Website @ www.london-realty.co.uk
Unpredicatble Market
written by Brad Pitt, December 11, 2009
You are right Peter. The entire market is not a single entity. It is made up of many small micro markets which have their own ups and downs and fluctuations are a part of marketing.

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