Resurgence of activity last autumn proves short lived according to Land Registry

The recovery in activity in the Ealing property last autumn looks to have petered out with sales volumes falling back to historically low levels.

The third quarter of 2017 saw a resurgence in activity in the market for flats in Ealing with brisk sales at the Vista House development in Dickens Yard. This included nine purchases of units for over £1,000,000.

However in the following three months only two new build units were sold in the W5 post code area according to the Land Registry. With thousands of new flats in the pipeline or being held as inventory by developers their is growing concern over how this backlog can be cleared.

Donald Collins, Sales Director at GoView estate agents said, " The 12 months to October 2017 saw the second lowest number of transactions in the Borough of Ealing within the last 20 years at 2678. To put this into context, there were 6581 in 2007.

“There is also a significant trend with a much great number of transactions pre-2007. Looking at the Land Registry data you can see a much greater number of transactions for the period pre credit crunch, a total of 57689 transactions, a yearly average of 5768. In this era, mortgage lending ability was more tolerant to individuals from a variety of financial and self-employed backgrounds and for those looking to invest - there were even 125% mortgages – unthinkable in today’s property lending climate.

“Given the above factors it is important to remember than Ealing Borough is a very sophisticated market of family owner occupiers, upwardly mobile professional individuals, development companies looking to create exceptional products more in keeping with Central London developments and long term investors. This diverse range of property owners within the Borough and the great level of pent up demand we have from buyers who will buy at the right price point to market conditions means that by consulting good local agents you are putting yourself in the best place possible to gain the best price for your property."

Overall there were only 74 sales in the W5 area during the last quarter of 2017, close to the historic lows seen during the financial crisis nearly a decade ago and half recent levels which were already depressed by concerns about Stamp Duty and Brexit.

The average sale price in W5 fell by 14.3% in 2017 to £690,714 but with volumes currently so low it is difficult to conclude that figure gives an accurate picture of the current market.

The prices and volumes in West Ealing have proven to be more robust with the area less dependent currently on new flat sales. Turnover has actually risen over the last year and the average price in W13 rose by 3.7% to £695,035. Some of this rise can be attributed to an increase in the proportion of houses compared to flats being sold.

On Monday 19 March, Donald Collins of GoView will be doing a short presentation and question and answer session on the Ealing Borough residential property market, its historic performance over the last 20 years and what potential future trends we will see over the next 5-10 years.

GoView have completed several of these seminars over the last 4 years and always find that they are popular. It is free to attend, but spaces are limited, so if you would like to come along please email Louise Heasman – louise@moderndaymarketing.co.uk. If you just attend on the night, it is unlikely there will be space for you as these events are generally capped at 100 attendees. The event is held at The Double Tree Hilton, Ealing Common, W5 3HN and is a 5.30pm registration for 6pm start. The event will not last beyond 7pm and there will be ample opportunity to ask any related questions. The Ealing branch of Handelsbanken will also be doing a short presentation and will be on hand for the Q and A.

According to the Nationwide House Price Index, property values in London as a whole fell for the first time in eight years during 2017 down by half a percent. This made it the weakest performing region of the country for the first time since 2004.

Across the UK the price of the average home rose by 2.6% to £211,156 with low mortgage rates and healthy employment growth supporting price. However, prices were held back by mounting pressure on household incomes and declining consumer confidence. Demand from buy to let investors was also held back by stamp duty and tax changes during the year.

The RICS, the professional body for surveyors, is predicting a further though slight reduction in sales this year and further price declines in the London area. They are not expecting these to be significant because of the lack of supply.

RICS UK Market Survey has recently shown buyer enquires stalling, sales volumes stagnating and sentiment turning altogether more cautious as a result in the final quarter of the year. They say stock on estate agents books close to all-time lows.

Tarrant Parsons, RICS Economist, commented, "Following a pretty lacklustre finish to 2017, the indications are that momentum across the housing market will be lacking as 2018 gets underway. With several of the forces currently weighing on activity set to persist over the near term, it’s difficult to envisage a material step-up in impetus during the next twelve months. However, the fundamentals are not much changed from the end of 2017, so levels of activity should soften only marginally when compared to the year just ending. A real lack of stock coming onto the market remains one of the biggest challenges, while affordability constraints are increasingly curbing demand in some parts. Given these dynamics, price growth may fade to produce a virtually flat outturn for 2018.

"That said, despite the recent interest rate hike, mortgage rates are set to remain very favourable, with the prospect of further rises seemingly minimal over the coming year. Alongside this, government schemes such as help to buy should continue to provide some support to sales activity."

Source: Land Registry

March 8, 2018