Soaring mortgage rates and the effect on asking prices in Chiswick

Research from Zoopla has found that soaring mortgage rates are having a knock-on effect on asking prices, with over four in ten vendors - 42% - accepting offers 5% or more below their asking price and 15% agreeing to cuts of at least 10%.

As reported on local news website ChiswickW4.com, questions have been raised about the sustainability of current high property prices at the top end of the market in Chiswick after estate agents were forced to slash asking prices.

The research reveals a surge in the supply of houses on the market. Greater supply will boost the choice available, giving buyers room to negotiate - which will further drive down house prices.

Christian Harper, founder director of Harpers of Chiswick, is dismissive of the notion that these price cuts are indicative of a turn in the market. It is a pattern familiar to him from his time selling ultra-high value houses in Belgravia, Hampstead and Notting Hill.

UNIQUE PROPERTIES VS HOUSE NEXT DOOR

“The £1m - £2m market remains highly active with good levels of transactions taking place. However, the +£3m market tends to consider different factors. These include foreign exchange rates, confidence, time of year, projected changes to HMRC liability, world politics and country specific stability, potential changes of UK government and the associated forecasted impact.

"This is in combination with a host of other considerations, including estate agents over-valuations due to lack of comparable evidence.

"It’s one thing to look at Land Registry and see what the typical house next door sold for but it’s quite another when you are valuing a house that is unique and five times bigger than most neighbours.

OFF MARKET

"As a qualified surveyor and an estate agent I can say that a certain amount of assumption needs to be considered when suggesting an asking price on an ultra-high value home. In most cases such houses are sold without marketing and the buyers don't even know they are looking for a house until their estate agent calls them with the opportunity.

"Around 25% of my transactions in Chiswick never come to market and are sold using my ‘little black book’ of lifelong contacts, who will essentially pay what they have to pay, rather than haggle in an open market."

Read the full article here.