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COUNTRY MARKET COMMENT
Correction, or free-fall?
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Above: Northamptonshire, £1.25 million guide
Top left: North York Moors, £1.2 million guide
Above far left: Essex, £2.0 million guide
Above left: Hampshire, £1.6 million guide |
Is the property market in a state of collapse and, if not, why not? The cost of living is, we are told, spiralling, fuel costs escalate daily and the finance houses have, not for the first time, exercised a U-turn, making mortgages harder to obtain and more expensive. The media, meanwhile, keep us fully informed as to economic frailties nationally and worldwide. It would not be too difficult to imagine Armageddon was nigh!
In the property world, we have been here before. Many economic and industry observers have, for some time, considered a slowing down of an overheated market inevitable and this view is supported by historical precedent. As always, the future is hard to predict but the credit squeeze has been underway for some months now and Jackson-Stops & Staff statistics record the effect so far.
Our market sector is better insulatedthan most, with many buyers less dependent upon mortgage finance, especially at the top end. Furthermore, despite current difficulties, we still live at a time in which an unprecedented number of high net worth individuals are chasing a limited and essentially finite supply of quality houses.
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Nevertheless, our statistics show that the number of new buyers searching for property is down significantly on last year. More positively, quality is up - a higher proportion of those registering are going on to buy. The number of properties coming to market, meanwhile, has remained relatively constant during the past 12 months, if below the peak of 2006. Not surprisingly, therefore, available stock has risen by about 20% on the year, reflecting a similar fall in the number of transactions. Prices have proved resilient however and our own average selling price is currently 5% higher than this time last year. However the days of kite flying are long gone and realistic pricing is of paramount importance in securing a sale. Overall, therefore, deals are down, but there is no evidence of panic selling nor of a dramatic fall in prices.
But what of the immediate future? Our perception is that the market will be fragile and price sensitive throughout the normally buoyant selling season. The middle to lower end will suffer most and, although the upper market is less vulnerable, there is likely to be some knock-on effect. Those who have capitalised during the boom years will still be around for that special property but there may be fewer new buyers in that fortunate position. There will be less speculative activity. We do not predict a crash in our market but there will be less activity, greater choice and hence more selective purchasers. Experienced agents who have seen it all before will undoubtedly prove their worth during the coming months.
Meanwhile, of course, HIPs have quietly become an established part of the house sale and purchase process. Having instructed hundreds to be compiled, we can report that the great majority have been secured without a hitch. This is welcome news. We remain concerned, though, that the position may change when it becomes compulsory to secure the HIP in its entirety before marketing commences, not least because, for properties with unregistered land or lease complications, finalising a HIP is often taking two months or more. But what of their value to the buyer? One real test of the value of HIPs, surely, should be the number of buyers independently asking to see this free (to them), bespoke report on the property in which they want to live and invest. So how many have asked to see it? From some of our offices, the answer was 'three'. Others reported 'two'. From the majority, however, came the answer: 'none'. We shall continue to work with our HIPs providers to make these reports worthwhile and to help buyers to appreciate whatever value they can add but, at this stage, it does look as though this will be an uphill struggle.
Above: Suffolk, £570,000 guide
Above left from the top:
Devon, £1.4 million guide
Gloucestershire, £1.6 million guide
Cheshire, £3.25 million guide
Somerset, £1.2 million guide |
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