House prices in Greater London are up 9.7 percent annually and 2.8 percent in the past month, according to figures out today from leading listings website Rightmove.
But what are the predictions for the housing market in Richmond for the rest of 2015? This Is Our Town Richmond spoke to the sales and lettings team at Estate Agents Jackson-Stops & Staff to ask them for their forecasts for the borough.
According to Land Registry figures for 2014, house prices in Richmond surpassed 20% for the year. Greater London surpassed inner London (Kensington & Chelsea saw an 11.5% rise for example). Why do you think this happened? Has this pace continued so far in 2015?
The Richmond borough has enjoyed sustained and stable house price growth historically and 2014 was clearly no exception, as we witnessed incredibly strong house prices being achieved in the Borough. A combination of factors was responsible for this, including improved economic health, on-target inflation and low interest rates, which all helped to fuel demand. All London boroughs recorded double digit annual growth in 2014; however, Richmond clearly enjoyed an incredibly strong ‘ripple effect’ out from central Prime London areas, which were beginning to reach saturation towards the end of 2014 and which, in turn, made Richmond appear relatively better value to buyers. So far this year, we continue to see strong demand from buyers and particularly renters, many of whom are looking to find a property, enjoy the excellent commuting links, great quality of life, brilliant schools and then settle long-term into this beautiful area as their families grow up.
The new progressive stamp duty rules introduced in December is a bit of a mixed blessing for Richmond. Over 5% of all million pound plus house sales in the whole of the UK in 2014 were in Richmond Upon Thames (according to research last year by Lloyds Bank). What impact is this new system having on house sales in the area?
In an affluent borough such as Richmond, the percentage of those affected by the stamp duty rises at the upper levels is clearly significantly higher than the national average. It is difficult to predict how the market will react so early on; however, we could find in the coming months that the rises will allow some purchasers to reduce their offers accordingly, in order to accommodate the hike in their overall purchase costs. It’s perhaps worth remembering that the new levels of stamp duty introduced back in December will benefit financially 98% of all property purchasers in the UK; indeed, we are seeing less price sensitivity around the old threshold prices such as £250,000 and £500,000, which are still relevant to Richmond residents.
A couple of weeks ago, Jackson-Stops & Staff hit the headlines because they were marketing an unbelievably small property (322 square feet – see picture below) in Twickenham for £300,000. This seems excessive. Is this the property market going mad or have you overpriced?
I’m delighted to report that this property went under offer within just a few days of being brought to the market by us; because it was something rather unique, it garnered a huge amount of interest and there were a large number of viewings across our Teddington and Richmond offices. As always, we did our research and looked at comparable properties in terms of location, style and size that have sold in the area, and we priced it accordingly; the buyer particularly loved the location of the property and we wish him happiness in his new home.
Traditionally, is the property market quite cautious ahead of a general election? Is that the case now. Should people be putting their house on the market this side of a general election or should they hold fire?
It’s certainly true that a general election tends to cause a slightly more ‘wait and see’ approach amongst buyers and sellers alike, as there is an inevitable period of uncertainty in the run-up campaign. Housing is, of course, a major issue in the political arena and whilst there is a cross party consensus to increase supply, there are also very real differences of opinion when it comes to taxation. The latest stamp duty overhaul signals continued political interest regarding intervention in the housing market. In our Richmond office, we have not started to see the effects just yet but we do expect that market could slow slightly for property sales; however, we continue to register large numbers of applicants looking to buy, the majority of whom are looking to purchase for their own use and aspirations, as opposed to any political timescale. We never forget that a house is an emotional purchase for most people, a home, not simply a financial transaction.
The Mansion Tax on £2m plus homes will be introduced if Labour wins the next election. It is a hugely contentious issue especially in Richmond where residents will be particularly hit. Would this completely stall the top end of the market in Richmond?
The Mansion Tax on £2m plus homes has been viewed by some as uneconomical and unfair. There is also concern over those ‘asset rich’ but ‘cash-poor’ households who have seen their property rise in value over £2m over a long period of time; this would certainly apply to a large number of long-term Richmond residents. Labour has tried to counter this problem through allowing such owners to defer payments until the property is sold. Having said all that, we generally find that if people are motivated to move then they will be keen to make it happen according to their personal timescales, irrespective of political issues such as mansion tax or stamp duty changes. It is impossible to predict how much the tax could stall the market at this stage and we will be monitoring all party manifestos on this topic closely during the lead-up to the election in May.
If people want to find an up and coming part of Richmond to buy in at the moment, where would you suggest would be a good investment for the future?
Well, it’s true that most areas in and around Richmond have truly ‘up and come’ in recent years! However, your budget will stretch a little further if you look out beyond the Hill and The Green towards the other side of the A316 in East Twickenham and also off the Kew Road. North Sheen and Lower Mortlake Road have seen several new developments being built recently and we certainly have Landlords who have purchased buy-to-lets in these schemes, which are producing strong rental yields.
What are the main reasons people want to move from other boroughs into Richmond?
There are so many reasons why people want to move from other boroughs into Richmond, it’s hard to beat on so many levels: there’s a great feeling of community spirit amongst its loyal residents, who enjoy the expansive green spaces and vibrant array of boutiques, cafes and bars on their doorstep. For families, schooling is a real pull, with some of the finest state and private schooling options in the country; commuters enjoy the excellent transport links into central London and our clients tell us frequently that Richmond offers them the best of town and country living.
What are the main reasons people leave the borough to go elsewhere?
We find that many of our clients choose to stay long-term in the borough if work commitments allow; this is particularly true of families once parents see their children settled happily in the local schools. Quite apart from the usual reasons for leaving an area – job relocation, returning to childhood roots, downsizing or upsizing – we do unfortunately see a relatively small number of people ‘priced out’ of the borough if they are looking to move to a larger property. However, the strength of the market does provide huge stability to those homeowners who have lived here for many years and who have seen an excellent return on their property investment.
What are your best Richmond-based properties for sale or rent at the moment?
For those looking to buy a stunning period property in a prime location off Richmond Hill Road, we are delighted to have brought a house to the market for the first time in 45 years; the accommodation is spread across three floors and offers six bedrooms, four receptions, three bathrooms, large entrance hallway, garden with side access, double garage and cellar. For those looking to rent in Richmond, we have a fantastic three bedroom apartment situated in a modern residential development that’s located 0.5 miles from Richmond centre and station. Do get in touch with our Richmond office to find out more about these and all of our other instructions, we’d be delighted to help : Oliver Griffiths, Sales Manager; Edward Simpson, Lettings Manager; 020 8940 6789; jackson-stops.co.uk/london