|Acton Property Market Was Performing Well Prior to Lockdown|
Estate agents now 'shell-shocked and confused' about what lies ahead
The Acton property market looks like it was recovering steadily in the early part of this year before the coronavirus hit.
According to figures recently released by the Land Registry, the average price in the W3 postcode area in the first quarter of this year was £616,608 a 10.8% rise on the same period in 2019.
Although volumes remained low particularly for flats, they appear to have been in line with the levels seen since the Brexit referendum.
Buyers were still willing to pay seven figures sums for family houses in the area with the top price paid so far this year £1,340,000 for properties on Emanuel Avenue and Spencer Road.
Transactions will have almost ground to a halt in the second quarter as it was impossible to show and market properties. As to what lies ahead, local estate agents appear to be completely dumbstruck. One said they were ’shell-shocked and confused’ and admitted to not having the faintest idea of what the next direction of the market would be. With a record breaking quarterly decline in the economy having just been announced and the date for the end of lockdown still not clear, attention has yet to be fully focused on the lack of progress in negotiations with the EU. Questions remain about the capacity of the market to absorb the large number of new flats being planned or built in the Acton area.
A locally based property market analyst said, “The current situation in Ealing and Acton encapsulates the dilemma for the government nationally. They need to get housing starts way above previous levels but the parlous state of the economy means the outlook for prices appears bleak. Combined with that the banks and building societies are building in expectations of falling prices and asking for up to 15% equity when giving out mortgages. They are effectively already pricing in a no deal Brexit and an anaemic economic recovery.
“Despite this, a general collapse in prices can probably be ruled out. The government has lots of weapons in its armoury including unleashing the power of buy-to-let again and low interest rates mean that yields are supported. Developers can’t sell new flats if secondary market prices are falling, so everything will be done to keep prices at pre-Covid-19 levels.
"Any hope that all the tower blocks planned for Ealing and Acton will now be put on ice are probably misplaced. This is the area of the economy that has the greatest potential to deliver a short term boost and the finances of both the council and TfL are very dependent on these schemes going ahead. Not that Ealing needs it, but I would anticipate that the government will be actively encouraging them to crack on and maybe extra powers will be given to accelerate schemes.
"The developers for their part will have a stronger hand and will be arguing for some of the affordability quotas to be reduced. As many of these units were never going to go to people on low incomes anyway, this isn’t necessarily something for social justice warriors to get concerned about.”
According to the Land Registry’s House Price Index, London was the best performing region of the country seeing a 4.7% rise in prices up to the end of March 2020. This brought the average price in the capital to £485,794. The rise for England was of 2.2% bringing the average property value to £248,271.
The Nationwide’s House Price Index showed a similar picture with a 3.7% annual growth rate for prices up until the end of April, the fastest since February 2017.
Commenting on the figures, Robert Gardner, Nationwide's Chief Economist, said, “In the opening months of 2020, before the pandemic struck the UK, the housing market had been steadily gathering momentum. Activity levels and price growth were edging up thanks to continued robust labour market conditions, low borrowing costs and a more stable political backdrop following the general election.
“But housing market activity is now grinding to a halt as a result of the measures implemented to control the spread of the virus, and where the government has recommended not entering into housing transactions during this period.”
He added that while the low level of transaction might mean it is difficult to calculate the index in the short term, “the raft of policies adopted to support the economy, including to protect businesses and jobs, to support peoples’ incomes and keep borrowing costs down, should set the stage for a rebound once the shock passes, and help limit long-term damage to the economy. “
There are regular updates on the local property market in the ActonW3.com newsletter. To register to receive it click here.
June 18, 2020