Property: The market is for turning: Estate agents are seeing distinct signs of an upturn in house sales, though prices remain depressed. David Lawson reports from north and south

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The Independent Online
WATCH the small ads over the next few months for a dinghy being sold in Newbury, Berkshire, under the name of Barton. It could be a sign that the property market is back on an even keel.

Tim Barton has done a lot of sailing in the past two years, but now his spare time is being eaten away by the paperwork involved in putting together home sales. 'Dictating letters, writing up reports, producing valuations - all the things I'm too busy to do in the office,' he says.

In fact, he is rarely behind his desk at estate agents Dreweatt Neate long enough to pick up a pen. When he does, the phone starts to ring. Every day there are two or three buyers to visit or homes to inspect, so during the evenings and at weekends he steers a dictating machine rather than a dinghy.

Sales in the bustling Thames Valley town were 30 per cent higher in January than during the same month in 1992. But Newbury is no aberration. The firm's chain of more than a dozen offices has had an even more impressive 120 per cent boom. Both the National Association of Estate Agents and the Royal Institution of Chartered Surveyors monthly polls show a similar surge of interest across the country.

Does this mean that the long-awaited recovery is under way? Mr Barton is not quite ready to give up his boat. 'January is traditionally a busy month as people go home-hunting after the new year,' he says. 'Things usually quieten down in February - and they have done so in the past week. Everyone is now on tenterhooks to see if they pick up again.'

In the meantime he has a string of deals under his belt. A repossessed cottage which raised no interest in December suddenly produced four bidders and sold last week for pounds 47,000. One house in a village just outside Newbury had been on the books since October, but has been snapped up for pounds 175,000 by a couple relocating into the area. A cluster of nine detached houses put up by Berkeley Homes came under swift pressure and three have sold within as many weeks for about pounds 250,000.

All this activity has had no impact on prices, however. In fact, the figures are slightly down on last year. That, along with lower interest rates, is one reason for the renaissance. 'Sellers have accepted that they must take less, just as buyers have decided things cannot get much worse so they may as well get the home they like rather than hold out for a better deal,' Mr Barton says. 'People are back to buying with their hearts rather than their heads.'

But doubt still hangs heavily over owners who moved in during the booming Eighties, when this former market town was transformed by an influx of electronics companies. Plunging values left some badly burnt fingers.

'Many potential buyers still find any excuse to put things off. They say they are waiting for the spring weather, waiting for the Budget, waiting for Easter . . . or just waiting for prices to fall further,' Mr Barton says. 'I have one house where the price has dropped 10 per cent since last year to pounds 100,000. More than 30 people have looked at the place, but not a single offer has come in.'

At the other end of the country, life is just as frenetic for Ian Bebbington of Renton & Renton in Harrogate, north Yorkshire, part of the Black Horse chain. On a typical day last week he crammed in six valuations on homes ranging from a one-bed flat worth just over pounds 40,000 to a pounds 275,000 six-bed detached house. Potential buyers dog his footsteps, rushing to look over the homes as soon as he has them in his window. Viewings run at almost 100 a week compared with about 30 last autumn, while sales have doubled to six or eight a week.

This is still short of the 10 a week he would expect in 'normal' times, but he is happy with some landmark deals that indicate the market may have hit bottom.

'One flat in a 15-storey block overlooking the Stray, Harrogate's central park, had been on the market for a year, even though the price went from pounds 125,000 to pounds 99,000. That has just gone.

'Another customer wanted us to get rid of his four-bed semi quickly, because he had seen another house at auction he desperately wanted. We sold it in a day for pounds 98,000. But it is not unusual to have a deal tied up in four days. Last year, sellers would have been waiting between three and six months.'

Realistic prices are helping. The valuations he handed out on that crowded day last week were lower than those given by other agents: pounds 60,000 for one semi and only pounds 42,000 for one woman selling her flat to get married. 'But people are not stupid. They have caught on to the fact that high prices drive away buyers.'

That is not always true, however. Peter Miller of the Royal Institution of Chartered Surveyors, warns that some sellers are threatening the fragile recovery with over-optimistic demands. Buyers are even less stupid, and will not pay over the odds, particularly when they remain uncertain about what the future holds.

His advice is to nurture any buyer you can get and don't hope for higher prices. The shadow of three million unemployed - and the threat of further job cuts - still gnaws at confidence and makes it premature to speak of a general recovery, Mr Miller says.

Shane Perkins of Keats in Muswell Hill, north London, is the sort of young, thrusting agent you might expect to ignore such caution. He, too, preaches restraint, however. 'We will probably look back in years to come and see that this was when things started to come right,' he says. 'But people should not get too excited.'

Buyers are choosy about what they will take nowadays - and there is a surprising shortage of suitable property. 'People are not selling the good stuff,' he says. His girlfriend, for example, paid pounds 84,000 for her flat in the boom, but could expect only pounds 67,000 today. And since interest rates fell, many can cope with the mortgage payments. 'People like this are locked in for another three to five years,' he says.

Sellers are usually those who have to move. Three of the eight deals he is handling come from divorces. Most others are repossessions or are forced because of the owner's death. Buyers are those with secure jobs and relishing low inflation and falling property prices. That morning he had sold a four-bed Victorian home which had been on the market for six months. It fetched just over pounds 220,000, compared with the original pounds 247,000. In another deal, a luxury flat bought for pounds 143,000 in 1990 went for pounds 97,000.

Price falls have also sparked a minor explosion in central London. Patricia Farley, of Farley & Co, abandoned family and guests on Christmas day to sell a flat to an impatient Italian and has not stopped work since. But she has the advantage of covering South Kensington, where foreign buyers have descended in force since devaluation and interest-rate cuts put UK property into the bargain basement.

British buyers have also picked up the faster tempo, however. Last summer, a group of nine flats in Collingham Gardens were put out to rent because Farley & Co could not find buyers. Since Christmas five have been sold for between pounds 130,000 and pounds 350,000. Kenway Cottage, a studio house which stuck on the market for six months despite a price drop from pounds 450,000 to pounds 385,000, has attracted two bids in the past 10 days.

Out in Newbury, Mr Barton is still expecting to get some sailing in this summer, however. 'There is still a reluctance to move,' he says. 'People want to see a lasting improvement in the economy before making a commitment.'

(Photograph omitted)

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