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A look at the housing market across Hertfordshire
A look at the housing market
Reports of a housing market in crisis are rife, but it’s not all doom and gloom, especially in perennial hotspots such as London and the Home Counties.
“Whilst no one is denying that the housing market is in a tricky situation but it is important to keep it in perspective,” said Peter Bolton King, chief executive of the National Association of Estate Agents (NAEA).
HOUSE PRICES
Despite repeated reports that house prices are plummeting, in reality, London's property market has remained surprisingly upbeat, demonstrating resilience in this first part of this year. Interest rate cuts have helped maintain the market. There are plenty of new buyers searching for property, and although some agents say that the market will do little more than tread water, other say that prices will continue to rise in hotspots such as London and the home counties.
In north London, Camden appears to be the hottest spot, with prices up 1.7 per cent. In the East, Dagenham remains a vibrant property market, largely because of its affordability, and that fact that it is commutable into central London, despite many homes there being under the stamp duty threshold.
While the mainstream property market stutters under the combined pressures of tightened lending criteria, buyer caution and seller apathy, the prime London market has put in another solid performance. Average monthly asking prices have risen 3.1 per cent, with all regions achieving positive price growth.
The most exclusive areas of prime London continue to flourish, proving that the demand from ultra-wealthy buyers remains strong in the capital’s hotspots, with annualised growth in Belgravia up 32 per cent and prices in Mayfair up 47 per cent.
Like the prime London property market, the prime country market is continuing to achieve monthly growth in asking prices, despite difficult economic conditions and a subdued mainstream market. February 2008’s rise in asking prices of 1.1 per cent constitutes the largest monthly increase since July 2007.
Indeed, the market had stuttered in recent months as the volume of property for sale accumulated to record levels, staving off any chance of significant price growth being achieved.
But since the turn of the year, the build-up of stock has started to alleviate, reducing to more traditional levels and culminating in a return to positive monthly price growth. The South East is the area where asking prices are benefiting from a more constrained supply, with monthly prices rising by 2.6 per cent. In particular, locations within the Home Counties, such as Buckinghamshire (up 4.2 per cent), Berkshire (up 4.2 per cent), Surrey (up 5.0 per cent) and Bedfordshire (up 6.1 per cent), are seeing above-average price rises.
Along with the news regarding house prices, there are other economic factors underpinning the housing market that are still strong, according to the National Association of Estate Agents’ (NAEA) Peter Bolton King.
Following the release of the recent Royal Institute of Chartered Surveyors (RICS) housing market survey, Peter Bolton King, called for steadiness amongst property market professionals and said that there is some good news.
“The positive news is that the RICS survey showed that just under a quarter of its respondents appear to have reported a rise in house prices, which shows how regionalised the picture regarding prices is, said Mr Bolton King.
“We are already aware from our own members that house prices are being affected differently throughout the country so to find such regional discrepancies comes as no surprise.
“We do need to exercise discretion in the figures, for instance the report states that the East Midlands is showing falling prices, yet the recently released Halifax house price index showed a 2.2 per cent rise in the same region. This also needs to be set against the fact that these areas have seen huge price rises over the last ten years.
“The market is battling with the credit crunch, which has undoubtedly had an effect on confidence. However, the key factors that underpin the housing market still exist – low unemployment, historically low interest rates and a pent-up demand for houses. We can see from the figures that it is not all doom and gloom out there and we need to tread very, very carefully before making long-term judgements on the market at this current, unsettled, time,’ added Mr Bolton King.
Halifax too says that a slower housing market must be taken in context, as house prices have risen by 179 per cent over the past ten years from an average price of £70,000 in late 1997 to £195,000 today.
Sharing the NAEA’s beliefs, Halifax claims that strong fundamentals underpin the housing market and sound economic fundamentals support house prices as the economy remains in good health and employment levels stay high.
It also says that the level of employment, a key driver of housing demand, is expected to stay at a record high in 2008.
There is a degree of scaremongering around, and, in light of the credit crunch and the Northern Rock incident, some are saying that the housing market is about to collapse. However, house prices adjusted for inflation have continued to rise.
Particular sectors and regions will vary as always, but the ever over subscribed London and the Home Counties remain as hot as ever.
RICS say that they think house prices will end the year broadly unchanged but should prices start to drop, pent-up demand from first-time buyers will buoy the market.
RICS does not believe that any drop in house price will be extended. It said that as in 2005, when the property market took a breather, unless there is a sharp rise in new sales instructions to accompany the drop in new buyer enquiries, it is unlikely there will be a great fall in house prices.
MORTGAGES
Caroline Flint, the housing minister, will join forces with the chancellor, Alistair Darling, next week to step up pressure on Britain's mortgage lenders to offer existing and new borrowers a fair deal. They will tell the Council of Mortgage Lenders (CML) that buyers must be treated fairly and that people are not stretched beyond their means. The lenders will be told to ensure that principles of responsible lending for customers are upheld and applied.
Despite the availability of mortgages being questioned in light of the current market conditions, there are still a number of good deals being offered by lenders. For first time buyers, Abbey is offering a 10 per cent minimum deposit, with a 5.69 per cent variable rate for the first two years, followed by 7.84 per cent after the two years.
Halifax is offering several first time buyer choices, which includes a refund of your valuation fee, no conveyancing fee and £500 cashback. One of the mortgages they offer to first time buyers for a maximum loan to value of 97 per cent starts at 5.99 per cent, followed by the standard variable rate, which is currently 7.25 per cent.
Nationwide are offering a two year fixed mortgage with an initial rate of 6.70 per cent, followed by the base mortgage rate (BMR) which is currently 6.74 per cent. They are also offering a three year fixed mortgage starting at 5.95 per cent, followed by the BMR, which is currently 6.74 per cent.
WHAT DO THE LOCAL AGENTS THINK?
Mitchel Barres of Village Estates, which has branches across Hertfordshire, said: “We are finding that property coming onto the market at what we would consider to be realistic asking prices, does not take long to sell, even in this tough market.
“There is still a great demand for decent property in desirable locations whatever the condition, as long as the price is right.
“We are still very busy with viewings, market appraisals, instructions, so it is certainly not all doom & gloom," Mr Barres added.
Managing director Percy McCloskey of James Estate Agents in Rickmansworth said: “The area we live in is sound economically and many of the reasons why people move house, such as jobs, marriage, divorce, more family, schools, moving to better areas, have not changed because of the credit crunch.
“There are still lots of mortgages available to good borrowers with decent deposits and secure jobs. Building societies and banks have not closed down and need to lend to carry on their business, so, in all, we are still very confident about the market,” Mr McCloskey added.
Mike Cole, Owner of Imagine Estate Agents in Watford, said: “I've said consistently that the underlying economic conditions mean that it is unrealistic to expect a crash in prices and any down turn is likely to be a blip.
“The discerning buyer could very well see this as a purchasing opportunity. If you can see beyond the negative headlines and speculation there are bargains to be had from motivated sellers to genuine buyers.
“It's a buyers market currently, but don't leave it too late before you take the plunge,” Mr Cole continued.
David Clayton from Claytons Estate Agents in Garston said: “Last year was a record year for Claytons; the best year we have had in 17 years! So this year was always going to be a hard act to follow.
“We are currently trading at the same levels as 2006, which we are very happy with under the circumstances.
“What people must remember is that it is now a buyers market, which means that while it might not be the best time to sell, it is a good time to buy. You can’t have it both ways,” added Mr Clayton.
Pictured: 'Rickmansworth' postcard by Raphael Tuck and Sons
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