Market Comment

What an extraordinary year we have just been through and I don’t know of anyone in the sales market who isn’t pleased to see the back of 2008.

The lettings market on the other hand had a bumper year and those estate agencies who saw the value of a strong lettings business early on in the cycle must be thanking their lucky stars. A strong lettings business has and always will be a hedge against downturn and I really don’t know how the businesses who focussed so strongly on the sales market have survived the past 12 months. There must certainly be a clear out or consolidation in the industry however unlike one of my more colourful competitors, I don’t wish that on anybody.

The Bank of England has today announced that it has reduced their base rate to 3% - its lowest rate since the 1950’s. Already a number of banks have confirmed that they are passing on the rate cut in its entirety which will dramatically improve sentiment in the market. If you haven’t looked for a mortgage recently, I think you’d be surprised at the rates that are on offer.

Contrary to popular belief, mortgages have been and are still available and, with over 3,500 different products to choose from, it is just not quite as easy as a year ago when there were over 20,000 products available. In my view this was abnormal and caused confusion for the consumer. Our understanding is that, providing you have a good credit history and a deposit of between 10-15%, finding a mortgage is a fairly straightforward process.

It’s tempting to try and second guess what is happening in a market from an ‘ivory tower’ but to go and experience what is really going on first hand is essential. As a result, I spend a fair amount of my time visiting our offices so I can see for myself exactly what is happening at the ‘coal face’.

So, what did I find? Well, firstly whilst I would not for a moment say it was busy, it is certainly busier than it has been for three months and interestingly the busiest section of the market is what we consider to be ‘first time buyer’ territory. There are an increasing number of first time buyers entering the market as they start to see real value, with prices having dropped by up to 25% in some cases. Contrary to popular opinion, mortgages are available and in fact two thirds of the transactions that we have agreed in our North Kensington office in the last week have been to buyers who are borrowing 90%. They are first time buyers with good jobs, a clean credit rating and a 10% deposit. In short, they are excellent, ongoing clients for the lending institutions.

For what seems like an eternity the gigantic ‘WestfieldLondon’ building site that has been an eye sore and the cause of much debate and congestion is finally nearing completion and at last we can see with our own eyes what all the fuss is about.

Shepherds Bush Station has to be the best looking tube/rail station in London and the sheer scale of this 21st century mega structure dedicated for the sole pleasure of shopping and eating will without a doubt draw people to this area in huge numbers.

The question for us living and working in the immediate area is of course ‘What effect will it have on us?’ and seeing the end result I can only say it has to be a huge positive.

Fewer homes are changing hands even than in the dog days of the early 90s but there is more to a market than numbers.  We ‘re beginning to see a wary turning of the tide of sentiment.  Buyers who were looking eight or nine months ago are now beginning to get back in the game because sellers are finally recognising that they need to be realistic in their pricing.

With so much focus on the negatives of house price falls, people are not looking at the positives – if you’re lucky enough to have a foot on the ladder, now is a spectacular time to trade up it.   The discounts we’re seeing on larger properties are proportionally bigger, so if you’re in the position to move, now’s the time to do it.