Market Review - West London Property

Security through quality

By Keith Gorny, Director

In recent weeks the headlines in the neatly arranged broadsheets of the Kensington Park Road newsagents opposite my office have been less about the global credit crunch and more about record oil prices, increasing food prices and rising inflation.

After months of unrelenting “crunch” reporting do Wapping and Fleet Street’s editors believe the newspaper buying public are just bored of this flavour of gloom or can we dare to believe  that we are through the worst of this particular financial crisis? While the “golden age” of amazingly cheap, widely available debt appears to be over, there are signs that the radical steps taken by government and central banks all over the world have steered us away from a collapse of our wider financial systems.

Despite contrary reporting there are tentative signs of stability with talk of the negative equity crisis having been overplayed. Fewer people bought at the height of the market than last time round and those that did on the whole had larger deposits and appear better able to sit things out. Defaults are low. Banks do appear to be raising capital so they can return to the business of lending and recent employment data in the UK is encouraging. Investors are buying up discounted risky mortgages and in May our Notting Hill office saw a dramatic improvement on the previous month in the number of house sales agreed with a value over £2.5 million. This could be a false dawn; sensational headlines may start reporting on the negative impact recent banking turbulence is having on the wider economy and in particular the housing market. Some commentators maintain that ultra cautious lending will dampen consumption and growth resulting in job losses and a free-fall housing market. Our view is that whilst the availability of credit in the country as a whole is onerous, in London, where the majority of buyers have a sizeable deposit, the effects are less pronounced.

Opportunity and progress in stormy conditions

By Keith Gorny, Director

After years of heading into the office via my local newsagent on Kensington Park Road, where I take a daily glance at the neatly arranged front pages, its clear to me that bad news must sell newspapers. Recently, quick to exploit our fears,the media have seized upon slowing house price inflation and have enjoyed head-lining gloomy speculation as imminent, unavoidable housing market melt-down. The less dramatic and less eye catching reality, that “things aren’t that bad” is left to the fi ne print of the last paragraph. Recent monthly data churned out by the various lenders and property institutions reports a more subdued national market. However, given their reliance on completion data, these national statistics reflect sales that were agreed months ago and do little to provide an insight into local and current activity or sentiment.

This review looks at what is happening in our immediate area. We will briefly consider the factors that have infl uenced market activity over the last couple of months before assessing those that will determine the market’s trend as we move into spring. While some in our industry appear to have adopted a generally negative outlook, revising forecasts down and predicting stagnation, our approach, enthusiasm, experience and innovative marketing methods has enabled usto meet the challenge of this less certain period and to produce some exceptional prices for our clients already this year.