Christian Harper of Oliver Finn interprets the Chiswick property market.
At first glance the outlook looks less than bright. It has become much harder for buyers to arrange a mortgage in recent months - there are far fewer mortgages available and interest rates are higher.
First-time buyers, already finding it a struggle to get a foothold on the property ladder, are having to fork out a ten per cent deposit minimum, rising to twenty five per cent to bag the best deals. This translates to more reasonable property prices as sellers have no choice but to have realistic expectations.
The latest Land Registry figures, published on Chiswick property prices (www.chiswickw4.com) suggest that values have started to come down slightly from the peaks seen at the end of last year. These figures include all transactions up to the end of 2007.
Land Registry figures are accurate but this data is based on past activity rather than what is happening right now in the property market locally. For example, a house put on the market last July might have been agreed in August, exchanged in October and completed in December.
In other words it can take six months to complete a transaction which is reported in the following quarter by the Land Registry. So the figures are up to nine months out of date and as a result it wouldn’t be fair to base today’s market on 4th Quarter 2007 results.
Peaks and troughs
Whilst it is a much tougher market than we have been used to in the last 10 years, good and fairly priced houses still sell. In eighteen years of estate agency, without fail I hear that the market will take a tumble the following year. Yes I have seen blips but in the medium term, my money is on bricks and mortar every time.
Now interest rates are stable I think this will improve the market generally though I disagree that lower interest rates would improve market conditions. Banks are working on such tight margins that if interest rates go down, I doubt they will pass any reduction on to clients.
I think that the culture of interest rate announcements being directly linked into property prices is a thing of the past. So if the interest rate does come down a quarter of a percent, we shouldn’t expect our building society to send us notice that our payments are going down.
