PROPERTY / Sunny intervals ahead: The barometer of buying is hard to read, but there are signs of a thaw in the market, says Caroline McGhie

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The Independent Culture
WHILE the Halifax Building Society may claim a 0.4 per cent fall in house prices during January, estate agents would beg to differ. To them the property market has resolved itself into such a diverse weather pattern of sectors and regions that it is hard for anyone to round them up in the same breath. Were they to try, however, the forecast would be closer to sunny intervals than gathering cloud.

In further contradiction of the Halifax view, the Nationwide Building Society, using a newer model for extracting its statistics, recorded a 0.4 per cent increase in prices in the same month. Meanwhile forecasts at the upper end of the market from Savills, purveyors of multi- million-pound houses, suggest a 19 per cent soar in prices across the country in the year ahead, peaking in London at 25 per cent.

To the house seller or buyer it may seem that the pundits have lost their confidence (or perhaps their brains?). But the contrasting views of the two building societies can probably be put down to the fact that they use different methodologies and record prices that have been subject to survey devaluation, while the contrariness of the Savills prediction is because it is confined to the houses of the wealthy.

All are agreed that there are now two markets operating - one in expensive houses of the type sold by Savills and another in bread- and-butter terrace houses of the type that make up the bulk of the building-society figures. 'The upper end is driven by capital which is created when companies go public or is imported in the form of rich foreign businessmen, and the bottom end is driven by income and borrowing,' says Patrick Ramsay, head of country houses at Knight Frank & Rutley.

Anecdotal evidence drawn from around the country fits with the suggestion that we are in the middle of a new dawn in the market. The first rays of sunshine are hitting the most expensive London houses, then filtering through into the Home Counties country-house market and other areas that respond quickly to London, such as Bournemouth, Bath, Cambridge and parts of Devon. Prices are not necessarily moving, but more people are house-hunting and more sales are going through.

Essex Man and Woman have been active during January. In Gants Hill, Essex, the Cornerstone office reports an 80 per cent increase in sales over January last year, mostly in pounds 70,000 terrace houses. The same company reports that signs of life have also been returning to Surrey Quays south of the Thames in London's beleaguered Docklands. Three-bedroom houses have gone up by 3-5 per cent, showing that expanding families are seizing the opportunity to buy at low prices. The neighbouring one-bedroom and two-bedroom flats meanwhile hang in a buyers' vacuum.

The rest of London, according to Winkworth estate agents, is very patchy, with properties in areas such as Pimlico selling rapidly and prices rising by 10 per cent in January. But houses in Streatham, a negative-equity blackspot, will linger for a long time yet. The good news is that negotiating margins have closed, and sellers are managing to sell at around pounds 1,000 below their asking price rather than pounds 5,000 below as they were last year.

The ''bounce back' factor can be seen in the country, too. More than 60 per cent of the buyers walking through the doors of Clifford Dann & Partners in Sussex have already sold and are renting a home, or they already have a buyer for their house, or they are cash purchasers. This means that some of the much talked of pent-up demand is beginning to show itself. In this part of the country the market is being driven by professional couples with rapidly growing families buying at between pounds 150,000 and pounds 300,000.

Again it is the upwardly-mobile families in search of the Range-Rover-plus-labrador lifestyle who are putting some zip back into the market in the West Country. Eight out of the nine offices of Stratton Creber estate agents in Devon and Cornwall sold more houses during January this year than they did in the same month last year, and some of them doubled the volume. Though sales have increased, the prices in country houses are completely static. But first-time buyers have been busy enough to make some small flats rise by 2-3 per cent.

Cambridge, fuelled by couples with high earnings and high expectations, is slightly ahead of the game. The trouble is that they all want stylish large Edwardian and Victorian flats or houses, and Pocock & Shaw estate agents say they can't get enough of them to sell. In January their office registered 500 new house-hunters.

In the North-west of England many more first-time buyers are out looking at small terrace houses than in November or December. Grant Westall-Reece, regional director of 43 Cornerstone offices across rural Cheshire, Merseyside, Manchester and Lancashire, says viewings of properties are up by 15-20 per cent.

The North-east remains relatively untouched by the flutterings in the South, according to Mike Nixon, regional director of 37 Cornerstone offices stretching from County Durham to Humberside. The number of buyers viewing increased dramatically in January but it is still very much a buyers' market and home owners are tending to try to sell their houses before they start looking for a purchase.

Scotland has not seen the wild swings in the market that the rest of the country has and is still managing to hold steady. The Edinburgh Solicitors Property Centre recorded a 4 per cent increase in prices in the last quarter of last year compared with the previous year.

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