Independent on Sunday Housing Market Report: Upmarket homes lead the property recovery
Sunday 11 July 1993
It shows that sale prices in general are now much closer to asking prices than they were over the same period last year - evidence that the three-year slump may be coming to an end.
Details from independent estate agencies confirm that the market began to revive in the first six months of the year, with house hunters surging out to view in April and May, then fell back slightly in the hot weeks of June.
But the fact that some high- quality houses are fetching more than the asking price does not mean that gazumping is back. Competing buyers are simply outbidding each other before an offer is formally accepted.
Another good sign is that the number of sales falling through dropped sharply in June. Deals that collapsed did so because the buyer or seller had a change of heart rather than because they had been discouraged by a nit- picking surveyor downvaluing the property - a common complaint at the end of last year.
Unlike other market surveys, the Independent on Sunday Housing Market Report is drawn from information provided exclusively by independent estate agents with a strong local presence and a stake in the discerning end of the middle market. It provides a voice for the smaller firms against the views already being expressed by large national chains.
Many of the small independents are long-established. Some have only one office; others have several across a region.
The Independent on Sunday Housing Market Report differs in other ways, too.
It is designed to measure activity in the market rather than simply to detect microscopic movements in prices which sometimes confuse rather than clarify. The Nationwide Building Society has said that the monthly house- price index for June showed a rise of 1.6 per cent over May, and an overall rise in the first half of the year of 3.5 per cent. It added that the average UK house price had gone up by pounds 844 in June, to pounds 53,710.
Yesterday the Halifax Building Society announced that house prices had fallen by 1.1 per cent on a seasonally adjusted basis in June, following a 1.2 per cent drop in May.
The Halifax had, however, noted slight price increases in April, and it cautiously predicts similar slight rises for the end of the year, with a possible 5 per cent increase by the end of 1994.
The IoS, by contrast, has confined its survey to an analysis of hard figures: the numbers of properties valued for sale compared with the number actually put on the market; the number of house hunters registering with agents; the offers accepted, plus exchanges and completions.
The main finding is that, in spite of increased activity from house hunters, sales figures are only marginally up on those for the same period last year, though there is more confidence.
The 86 estate agents' offices that took part recorded 938 new properties coming on to the market during June. Generally, agents were getting one property to sell for every two valuations they carried out. An analysis of 52 of the offices showed a total of 845 valuations translating into 477 houses for sale.
The anecdotal evidence seems to suggest that many more home owners are thinking of selling than are actually entering the market. This is borne out by the fact that the number of viewings by potential purchasers is well up on the end of last year.
Roughly one-fifth of the properties on the market with independent agents were sold or put under offer during June. A sample of 69 offices recorded a total of 6,189 properties on their books, yielding 715 exchanges and completions plus a further 547 offers accepted. These offers in turn will fuel the high summer market and should add a little strength to the autumn market when they will be due to complete.
However, many agents report that viewings went flat during June. James Green, of Stags estate agents in the village of Dulverton on the southern edge of Exmoor, said his viewing diary halved. 'I think that March, April and May were busy because people were coming out of renting and into buying. They have all bought now and we are back to stalemate. The other interesting thing is that there aren't enough houses on the market. Job security is a problem, and people's wages aren't increasing.'
But Russell Whitlock, of Whitlocks in Penzance, reports an increase in viewings. 'There is a considerable amount of window- shopping going on which is very frustrating for the vendor, but then again if no one comes even to see your house you haven't a hope in Hades of selling it.'
The pattern across the country is similar, with estate agents in the North enjoying the fact that country properties in their region are attracting similar prices to those in the South. Viewings and sales figures are highest with agents in London, Wiltshire, Berks, Oxon, Hampshire and East Anglia.
It is at the upper end of the market where pretty properties with a romance factor, including those in need of restoration, are fetching more than the asking price.
In Chelsea and elsewhere in west London, for instance, John D Wood has recently sold four properties in the pounds 200,000- pounds 650,000 range for up to pounds 25,000 more than the asking price.
Another agent priced a property at pounds 600,000 and eventually sold it for nearly double.
JANET WIGGINS feels she has suffered to sell her two-bedroom garden flat in west London. It first went on the market in March 1992, but she had to wait until spring this year before she suddenly found four buyers all wanting it.
In 1992 the flat was priced at pounds 110,000. This March it was cut to pounds 105,000, and then pounds 99,950; 25 people came to view, but she felt they were simply cruising through like tourists.
Then she dropped the price to pounds 92,500, and 13 people came in a single week at the end of June. Buyer A offered pounds 92,500. Buyer B topped it with pounds 93,000, buyer C with pounds 94,000, and buyer D with pounds 94,000. Buyer A countered with pounds 96,500 and offered to exchange and complete by the end of July.
However, Janet says she is still pounds 35,500 short of what she spent on it. 'I bought it for pounds 122,000 and spent at least pounds 10,000 on landscaping the garden and other things. It has taken a long time to sell, I have been mucked about by potential buyers, and at the end of it I have still lost financially.'
(Photograph and table omitted)
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