Property Articles | Real Estate Articles

Dominic Agace, Managing Director of Winkworth Franchising Ltd, is joined by 14 Winkworth agents from across the Capital, the UK, France and Portugal giving comment on the residential property market so far this year.

Dominic Agace, Managing Director of Winkworth
'We have seen renewed activity in the first couple of months of 2009 as those who can attain finance look to take advantage of price reductions of up to 25% from 2008.

This has been led by the central London market where foreign buyers are taking advantage of the weakened Pound, which provides a further 20 - 30% discount on their already discounted property purchase. With this discount on currency alone, popular markets, such as Notting Hill, have become more accessible to international buyers, the Pound has not dropped below 1.4 against the Dollar since 1985. Whilst Sterling remains weak, we will continue to see more international buyers and larger funds entering the London housing market, increasing the number of sales being agreed in the latter half of 2009.

However, we are still seeing the majority of UK buyers constrained by finance, and this continues to be the overriding factor in the property market at the start of 2009. Whilst this remains the case, we will not see any price increases, and it remains a priority that credit is freed up. In particular, whilst standard variable rates are reducing, fixed rates remain high and so this is preventing people moving mortgages and therefore properties.’

LONDON

Alex Thompson, Director of Winkworth Notting Hill
‘In general economic terms, there is little doubt that more difficult times are ahead, but there is a strong argument to say that the Notting Hill sales market is likely to recover sooner than the broader economic climate might suggest. Notting Hill prices reacted very quickly to the changing environment and, after over 16 months of falling, are now more than 30% lower. This means prices here have already made their way through the majority of the widely anticipated peak to trough drop.

During January we received more offers, agreed more sales and registered more applicants than in any of the last 18 months; in one instance five buyers competed for one property which was agreed after best and final bids. In reality, rather than a reversal of price falls, the latest Halifax index findings supported the slowing in their descent which we are indeed seeing locally, this is being brought about by buyers stepping back into the market - a most welcome change.

One common factor already apparent and likely to remain throughout
2009 is the higher number of international buyers. We have already seen many European buyers entering the market, buyers for whom the Euro's relative strength has more or less doubled the benefits of the price falls; this is, in fact, true for most non-sterling denominated buyers.

Richard Woolf, Franchisee of Winkworth St Johns Wood
‘The New Year began with a flurry of activity in St John’s Wood, with very encouraging numbers of new applicant registrations. There has also been a significant increase in viewings, offers and sales agreed. Hopefully this level of activity will continue throughout the year.

In terms of lettings, activity levels have also been high so far this year. There is a range of good quality stock available for tenants, from one bedroom flats to prestigious five bedroom period houses. In the first week of January, we registered an unprecedented number of rental applicants. This, coupled with a good quantity of stock, means that supply is meeting demand.’

Ian Dickson, Franchisee of Winkworth offices in Hammersmith and Shepherds Bush
‘We have seen registrations of new buyers increase by about 150% this year, compared to any time in the last six months or so. This is a really positive sign and buyers seem a lot more bullish than they were last year.

The important point to consider when studying the central London housing market is affordability as house prices fell by around 25% last year. We appeared to reach the bottom of the market in central London at the end of last year and have had two cases of competitive bidding on sensibly priced properties so don't leave it too late - prices will start to creep up!’

Claudine Morgan, Manager of Winkworth Hackney
‘So far this year we have had a large increase in the number of enquiries and registrations from buyers and sellers alike. I think sellers are now coming round to the idea that the market has changed, mainly because agents are being more consistent in their pitches and prices are balancing out. Buyers are re-appearing, conscious that there are bargains to be had and better mortgage rates now available. I believe that if the Stamp Duty threshold was increased to £250,000 that would really help bolster the market, here in East London.

We are also seeing large property investment companies coming back to purchase. They are viewing the residential property market as an ideal investment, due to low interest rates achieved on cash balances in the bank. The overall drop in East London is about 20-25% from its peak, providing a substantial discount from summer 2008 prices.’

James Wilkinson, Franchisee of Highgate
‘Here in Highgate, we've seen a gentle increase in sales enquiries so far this year, although some offers received are at considerably less than asking prices. Curiously, there is still a shortage of property for sale. In terms of rental properties, rental values appear to be holding as demand meets supply.’

Jeff Cohen, Franchisee of Borehamwood
‘2009 started on a much more positive note than 2008 finished on. Most of more realistic our sellers have realised that there is a need to be more flexible in the price they are willing to accept for their property, and this in turn has resulted in many more sales being agreed. Buyers have also recognised that, by putting forward realistic offers, they are more likely to get the property they want. This has resulted in the market being much better balanced. People trading up know that the price gap between what they want to sell and hope to buy is probably smaller now than it ever will be again.

I am pleased to report that more and more buyers now believe that the market has 'bottomed out'. In the last property down-turn, there was a large volume of sales stock, whereas now there doesn't seem to be that many new instructions coming onto the market.

Furthermore, an increasing number of parents are again contributing towards their children's deposit, enabling first-time buyers to get onto the property ladder. It would seem the bank of Mum and Dad is once again open for business!

Nigel Field, Franchisee of Winkworth Kennington
In January, we had twice as many applicants than in the three previous months last year. In terms of viewings, there was also a sharp increase with a 206% increase in January 2009 from December 2008. On the whole, sellers are being more realistic, which is resulting in more people buying. This month, we even had a 'best and final' situation, with two people bidding on a two bedroom flat. The flat sold for in excess of its asking price. People are now seeing the value in the market, as prices have come down and affordability is increasing.

The market is not flooded with stock, but there is a steady stream. With interest rates at an all time low, sellers are only selling because they want to, not because high interest rates are forcing them to move.

Generally, we are a lot busier, compared to this time last year. I think there is now a light at the end of the tunnel that was impossible to see in 2008.’

OUT OF LONDON

Michael O’Shea, Franchisee of Winkworth Basingstoke
‘The start of the year has seen a continuation of increased interest from buyers, which started in November 2008. Viewing levels have also increased and this is now translating into a greater number of offers being made and sales agreed.

At the same time, the number of new properties coming onto the market has fallen. If this trend continues, prices will stabilise very quickly. We have even seen some examples of more than one buyer bidding for the same property.

There has been a constant demand from tenants moving into the area although they continue to enjoy a wide selection of properties from which to choose as stock levels remain high. Landlords who offer good quality accommodation at the right rental level are finding tenants very quickly, therefore sensitive pricing is key.’

Steve Rivers, Franchisee of Winkworth offices in Brighton & Hove and Shoreham
‘The first two months of the year have shown an increase in demand; we have agreed more sales in six weeks than we did in the two months prior. There has been an increase in viewings, and in particular, in second viewings. Buyers are accepting that the bottom of the market is not too far away, and those buying for the long term realise that there are good opportunities to be had.

The number of valuations has decreased slightly and so there is less stock coming onto the market. If demand continues to increase we may start seeing a shortage of stock, which could hold the bottom by Easter this year. At the moment, any property of good quality receives at least two interested parties.’

Martin Thomson, Manager of Winkworth Sleaford
‘During January and February this year, we have seen a significant increase in the levels of viewings and improved levels of agreed sales. Coupled with this, sellers are finally becoming more realistic which is, in turn, helping to increase the number of agreed sales.

Although the number of sales is lower than this time last year, the number of agreed sales falling through has greatly reduced.

The market is steady at present and I believe it will progress at this level during spring and gently improve from there onwards. Client confidence should grow, however the banks must start to offer more relaxed lending to first time buyers, I am still seeing buyers with a 10% deposit who are struggling to get a decent mortgage deal.’

Jayne Shelley, Franchisee of Winkworth offices in Sheffield
‘Since Christmas, we have seen a huge difference in the volume of business, at all levels. In January, we had an increase in applicants and an unprecedented amount of viewings (over 400). Sales are better than they have been for six months. We have a number of properties that have sold for more than the asking price and we are back-to-back with market appraisals.

We are also seeing an influx of investor cash buyers, from around the city and London, who are snapping up the repossessions and other stock that is negotiable on price. One seasoned property investor from London bought four properties from us this month.’

INTERNATIONAL

David King, Director of Winkworth France
‘In the more cosmopolitan areas of France, such as the Côte d'Azur, the market, although quiet, is nevertheless ticking over with continuing interest from the French, Scandinavians and other Euro-zone nationalities. In Northern and Western France particularly, there have been reports of price reductions of up to 30% and this is certainly the case where British vendors are relocating back to the United Kingdom as these reductions are compensated by an equivalent percentage fall in the value of Sterling against the Euro.’

After years of increases, overall prices were down 3% last year. However, bank lending has always been much stricter and more controlled in France where mortgages of 70% of value are generally the maximum. There is therefore less debt and as such local markets will not suffer as much as those in the United Kingdom.’

Mary Mangan, Director of Winkworth Portugal
‘The market in Portugal has slowed in the last five months as British purchasers struggle, in particular with the Sterling-Euro exchange rate. Prices have dropped by around 14%, however vendors here are reluctant to accept the reductions in price and, as they usually have high equity, they are prepared to sit it out and are not under pressure to sell. This in turn, has caused a reduction in the volume of stock. Prices therefore shouldn't reduce as much as they have in the UK.

As the number of British purchasers has reduced, the majority of buyers are now from Northern European countries; looking for opportunities

Portugal is the closest sunny destination to the UK and access to the country remains excellent, I hope that these factors will help to speed up recovery from the current financial crises.’