Buyers' Strike for New Build Flats in Ealing Continues
No sales reported in the latest three months according to Land Registry
Buying interest in newly built flats in Ealing continues to be minimal according to the latest figures from the Land Registry.
In the three months to the end of September not a single new built flat has been reported as sold so far and only 36 flats in total changed hands suggesting that turnover in the secondary market is close to grinding to a halt.
This has already raised concerns about the viability of many of the major development schemes in the Ealing area including the Filmworks project on the Broadway.
One local property market practitioner said, "It is probably too early for the Filmworks units to appear in these figures as the sale won't be reported until construction is completed but it is going to be a lot harder to sell them if there is a significant overhang of unsold completed units in the area. The marketing of the scheme so far has been quite low key so they may be gambling on a good outcome on Brexit before giving them a major push."
An additional problem for flats in Ealing is that many of them, particularly the newly built ones are priced in the £500-£600,000 range and recent stamp duty changes have meant that the effective tax rate for purchases at these prices is relatively high. One local agent told us, "buyers are recognising they can get much better value if they stay below the half million mark but that rules out a lot of the better situated Ealing developments."
Overall the average price of a home in the Ealing W5 post code area in the third quarter was up by 8.9% over the year to just over £800,000 but the rise was entirely due to a higher proportion of houses being sold as turnover of flats declined sharply. The average price in West Ealing (W13) has been broadly static over the last year at £713,569 with the level supported by continued buying interest in larger family houses.
The relatively robust demand for detached and semi-detached properties across W5 and W13 has supported prices of this kind of property and over 20% of homes reported as sold in the latest three months in Ealing have gone for over a million pounds.
The latest figures from the Nationwide’s House Price Index show that prices nationally have continued to rise slowly with the average sale price now £214,534 up by 1.6% over the year.
Commenting on the figures, Robert Gardner, Nationwide's Chief Economist, said, “Looking further ahead, much will depend on how broader economic conditions evolve. If the uncertainty lifts in the months ahead, there is scope for activity to pick-up throughout next year. The squeeze on household incomes is already moderating and policymakers have signalled that interest rates are only expected to raise at a modest pace and to a limited extent in the years ahead.”
The October 2018 RICS UK Residential Market Survey results show the recent softening in new buyer demand beginning to feed into a slightly negative trend for national house prices in the view of the surveyors’ industry body.
The report says, “A sustained softening in demand over recent months has likely driven the weaker price trends in parts of the country. The net balance for new buyer enquiries ticked down to -14% in October (compared with -12% last month), marking three successive reports in which headline demand has deteriorated. Affordability pressures, political uncertainty and a lack of fresh stock coming onto the market all continue to hinder activity to varying degrees.”
The report adds that new instructions to surveyors continue to fall meaning stock levels remain close to all-time lows and rendering any chance of a meaningful turnaround in the near future unlikely. A net balance of 30% of respondents reported the level of appraisals being undertaken to be down on an annual comparison.
Looking ahead, respondents in London and the South East were the most negative with price falls expected over the next twelve months.
Source: Land Registry
November 15, 2018