Prices fall by about 10% as number of transactions falls sharply

The Acton property market appears to have fallen by about 10% from its recent peaks according to the latest official figures leading some local agents to suggest this might present a buying opportunity.

According to the Land Registry, in the W3 post code area during the second quarter of 2016 the average price paid was £537,227 down by 10.1% compared with the previous three months. Over the course of the last year the level is more or less unchanged.

The most notable thing about the figures is the sharp decline in turnover. Although it is likely the numbers will be revised up at a later date they will still show a substantial slowdown in the number of transactions in the Acton area. These numbers only go up to 30 June and therefore cover just a week after the Brexit vote. Local agents report that sales activity has been even slower since then. The volumes of sales are currently too low to make firm conclusions about the direction of prices more recently.

Mark Lawrinson, Regional Director, Portico London estate agents said, “We are seeing buyers holding off on making any big property decisions due to uncertainty surrounding the decision to leave the EU. But if you’re buying a home, then holding off could be equally as detrimental as it could be positive. For example, a lot of buyers haven’t managed to get on the property ladder because they were determined to chase the lowest prices post the last financial crisis. Unfortunately while waiting for prices to drop, they did the opposite, and they ended up watching the market rise again to levels unaffordable to them.

"Money is as cheap as it can be to borrow, which makes getting on the ladder that bit easier and moving up it more affordable. Unfortunately nobody can predict the future, so if you’re in a position to buy today then don’t hesitate; remember you’re buying a home first and an investment second. We’re still forecasting modest growth in the London market, with hotspots created by infrastructure projects like Crossrail helping to significantly increase values in Acton. We are very confident that W3 will retain its status as a hotspot for capital growth.”

Activity at the top end of the market come to a virtual standstill with very few transactions other than investors buying for yields. The top priced property during this period was a ten bedroom house on the Vale currently divided into studio flats which went for £1,710,000.

Faisal Yousuf of City Deal Estates on Churchfield Road said, “Demand from buyers for larger properties, typically reserved for owner occupiers, has softened considerably and the outlook for these properties continues to look challenging. Demand from buy to let investors has also reduced significantly following the stamp duty changes, however, properties at the lower end of the price spectrum are finding interest. Demand from developers remains incredibly strong; our clients continue to bid for properties we appraise as being suitable fordevelopment/investment.”

Across the whole of London Prices rose by 12.6% over the twelve months to June bringing the average price up to £472,204. Prices rose marginally during the month of June.

For the UK as a whole there was an annual price increase of 8.7% which takes the average property value to £213,927.

Following a strong increase in sales in March, UK home sales fell by 55.4% in April 2016, recovering slightly in May and June 2016. The swings in volume are believed to be primarily due to Stamp Duty changes. This was mirrored in London where 14,783 sales were recorded during March but this fell to 4,368 in April.

The latest report from the Royal Institution of Chartered Surveyors (RICS) has concluded that housing market activity has softened with sales and interest from new buyers continuing to wane. They say sales and enquiries continue to display a negative trend in London - although expectations point to a more stable picture in the coming months. Stock levels in the capital are at record lows and new instructions have declined markedly. Across London, 42% more surveyors reported a fall in transactions; the fifth month of decline.

The RICS say that this reflects a continuation of a trend that started in March following the implementation of the tax surcharge on investment purchases. Anecdotal reports provided by contributors to their survey suggest both the tax change and the ongoing fall-out from the EU referendum are contributing to the current mood in the market. However, looking a little further out, London has seen a notable turnaround in sentiment for the year ahead, as confidence towards the outlook for transactions climbed to a seven month high.

Simon Rubinsohn, RICS Chief Economist, commented: “The housing market is currently balancing a raft of somewhat mixed economic news alongside the latest policy measures announced by the Bank of England, which have already begun to lower cost of mortgage finance. Against this backdrop, it is not altogether surprising that near term activity measures remain relatively flat. However the rebound in the key twelve month indicators in the July survey suggest that confidence remains more resilient than might have been anticipated.“

In a forthcoming edition of the ActonW3.com newsletter there will be a complete listing of recent property sales in the area. To register to receive it click here.

August 18, 2016