Spring has come early to the property market for houses under £1 million, in contrast to high-end properties where a pre-election chill prevails, according to national estate agents Jackson-Stops & Staff.
Movement has increased in the low to mid level of the market as buyer confidence returns, owing to low interest rates, favourable long term mortgage deals, stamp duty reform and positive employment growth. In contrast, sales of properties over £1.5m remain slow, with the more nervous sellers choosing to sit tight until after the General Election in May.
Nicholas Leeming, Chairman of Jackson-Stops & Staff, with 44 offices nationwide in London’s smartest districts and across the cathedral cities and market towns of England, said: “The positive effects from the stamp duty reform later last year are now starting to be felt, with activity levels increasing for properties priced below the £937,500 mark. Coupled with low interest rates, improving regional economic recovery and investment in infrastructure, it appears that Spring has come early for this section of the market.
“At the top end of the spectrum, owners of homes priced at £1.5m and above are treading carefully, as fear of increasing property taxation, regardless of the political colour of the next government, continues to dominate. Transaction levels have slowed in London, with a distinct lack of stock in certain prime areas such as Mayfair. International buyers who have purchased property in the capital are holding on to their investments.”
Activity in the mid-market has been felt across a number of regions in the South East, with Alastair Hancock, Director of Jackson-Stops & Staff’s Sevenoaks office, reporting that well priced mid-level properties are “selling very quickly.”
He says: “Stamp duty reform has boosted the market at the low-mid level where we have seen lots of activity – although we are still burdened by a lack of new stock. Well priced property in commuter towns continues to sell well and while the threat of mansion tax is looming at the upper end of the market, the effect has not been too detrimental. People whose children have secured school places for September will move after May regardless of the election outcome.”
The Cotswolds market has also enjoyed a busy start to the year. William Leschallas, Director of Jackson-Stops & Staff’s Burford office, says: “We had an incredibly busy January and February to the year but activity levels have started to wane with sellers becoming anxious ahead of the election. We have a good supply of buyers from all over the UK, not just London, waiting to pounce when the right property comes up at the right price – but properties must be well presented as buyers are incredibly choosey at present.”
The early spring has also come to East Anglia where Nigel Steele, Director of Jackson-Stops & Staff’s Norwich office says that the increase in confidence comes as welcome news following a slow winter.
He says: “It looks as if the ripple effect of rising property prices in in London and the commuter belt is finally making its way up to Norfolk, we anticipate an improving market as the year progresses. Norwich itself and the nearby market towns are performing well, as there has been a marked increase in those looking to relocate back to more urban areas to avoid travelling and for the convenience of being within walking distance of shops and good schools.”
Tim Dansie, Director of the Ipswich office, said: “There is no doubt that the changes in stamp duty have helped the market below £1,000,000 and we have seen good interest and strong trading through January and February for this section of the market. The upper end in excess of £2,000,000 is wary of the possibility of the introduction of mansion tax, although three of our sales above this figure did go through even allowing for a significant increase in the amount of stamp duty paid and the possibility of mansion tax in the future.
“The signals from London are that the market in the capital is slowing down. There has been a bull run for nearly 10 years in London and, as a result, vendors have been reluctant to sell and move to the country. Now that this market has stalled it has allowed vendors to consider their position in London, to see what their property is worth and then relate it to the country market which now looks very good value. We saw a number of our high end properties sell in the last 6 months to buyers who were selling in London close to £3,000,000 and buying in the country for under £2,000,000 with significant change in the bank.
“The Essex/Suffolk borders is a popular place to buy with attractive villages and countryside close to Colchester and Manningtree stations and anything of quality here sells well. The hotspots on the coast remain the same with a very strong market in Woodbridge, Orford, Aldeburgh and Southwold.”
Tim Sherston, Director of Jackson-Stops & Staff’s Newbury and Goring offices says: “Transaction levels so far this year have been reassuring, and the percentage of London based buyers on our mailing list has also risen significantly, due to the current wide margin between London and country prices, which is likely to decrease as country prices eventually catch up. Crossrail is already a key point of discussion in and around Reading with many predicting that we are due a price lift – although this is yet to be felt. The market for properties priced at £1.5m plus is on pre-election hold, with buyers and sellers waiting to see the outcome of the General Election before committing to a move.”
In Dorset, political uncertainty is also impacting the market with both buyers and sellers sitting on the fence, resulting in limited new stock levels. James Wilson, Director of Jackson-Stops & Staff’s Shaftesbury office, also highlights that buyers are increasingly unwilling to take on renovation projects, he says: “Buyers are more reluctant than ever before to take on projects or indeed properties where overheads are likely to be high.”
In West Sussex,Nick Ferrier, Director of Jackson-Stops & Staff’s Midhurst office, has also seen more interest in properties with turnkey appeal. He commented: “Appetite for property in immaculate condition appears to out-perform property with ‘potential’, with buyers seeking something that they can move into without carrying out any work.”
He adds: “Overall, we are shaping up to be on a positive trajectory for 2015. We expect that the market will continue to liven up but as expected, election jitters are at play, with numerous enquiries about stamp duty, mansion tax and the perceived price correction in London. We are already seeing an increase in registrations from London based buyers.”
In Northampton, homes under the £600,000 level are moving quickly as the impact of stamp duty reform becomes apparent. Quentin Jackson-Stops, Director of Jackson-Stops & Staff’s Northampton office says that there are a number of additional factors helping to boost the market at this level: “Positive employment outlook combined with low interest rates has resulted in greater buyer confidence, with strong levels of activity at the middle of the market. Despite this, stock levels remain generally low.”
In the country house market, the threat of mansion tax is a concern for owners of listed buildings.
Dawn Carritt, Director of Jackson-Stops & Staff’s country house department, says: “There is a case for listed buildings to be exempt from mansion tax. Many of these properties fall into the £2 million bracket, yet are not large enough to be open to the public (at the moment any listed building open to the public commercially is exempt from ATED) meaning that the owners face a heavy tax bill. It will also potentially stop owners embarking on expensive restoration programmes which could take the value of the property over the £2 million mark, let alone restoring redundant outbuildings and putting them back into use.”
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