By Anna Tyzack
SOME EXPERTS BELIEVE HOUSE PRICES HAVE HIT THE BOTTOM IN CENTRAL LONDON, BUT WHO KNOWS WHAT’S TO COME IN SEPTEMBER.
There have been mutterings this week that the house prices have already hit the bottom Nick Candy clearly things they have; estate agents in central London believe prices could have reached their lowest point as early as November last year. So does this mean we have all missed our chance to cash in on the downturn?
It all depends on where you live. Hamptons estate agency produced a heat map of house prices in London this week. Chelsea (SW3) glowed bright red – where prices have risen 9 per cent since 2008. Outer Chelsea (SW10), South Kensington (SW7), and Notting Hill (W1, W2 and W8) glowed orange, as did Borough (SE1) and Brixton, while Wimbledon shone yellow. “If you are looking for the bottom of the market in prime central London, I’m afraid you have missed the boat,” says Penelope Court, of estate agency Beauchamp Estates.
But every other London borough was coloured various shades of green, indicating drops of up to 18 per cent. If the map were expanded to the rest of the country, it would also be green, apart from hot spots such as the Home Counties, Sevenoaks and Bath, where prices are bolstered by London money and a lack of supply. Halifax’s index shows prices are still falling, by 0.5 per cent in June.
Experts believe the summer bounce in prime central London prices could drop back in the autumn. “I think prices will fall a further 5 to 10 per cent, either towards the end of this year or early 2010,” says Camilla Dell of buying agents Black Brick.
In January this year I asked estate agents and property experts across Britain to say when they thought prices would be at their lowest. September 16 2009 was the midpoint. Could it be that they were about right?
Yes, if the shortage of properties on the market continues. Price rises are caused by a lack of supply and an increase in demand. “If supply for country houses stays the same over the next six to 12 months prices will continue to harden,” says Tom Hudson of Middleton Advisors, who thinks November 2009 will mark the bottom of the market for country houses.
If supply were to increase, this could push prices down again – the W-shaped recovery, rather than the V.
But right now, why would anyone sell unless they truly had to? I asked myself this question on Monday when I received an offer on my flat for £100,000 less than the original asking price. For a small flat, this is some reduction.
Perhaps in the end, recovery will be L-shaped. The rate of price decline has slowed, according to Halifax’s latest figures but unless something happens (borrowing restrictions loosen, or another Lehman Brothers) the market will remain flat for some time.
I’m going to wait until September 16 before considering this week’s offer. By then we should have a clearer idea of the shape the recovery is taking.