There are Rightmove house price surveys, RICS property indexes, Halifax reports and Nationwide round ups all trying to give some indication of what house prices will do in 2014.
Collier Stevens are Chartered Surveyors at the sharp end. We carry out building surveys and RICS Homebuyer Reports for purchasers in and around London and the South East and have a handle on what the market is doing now. We’re not economists, valuers or agents, more informed spectators…
The London market is unique, with wild values being placed on, sought, and achieved for some often quite ordinary property – at the end of last year we did a survey on a 2 up 2 down cottage in a nice, but not top dollar part of town advertised for £500,000.00. Although the property was pleasant, it had some minor problems on survey and we instinctively felt it was overpriced. The mortgage valuer agreed and valued the property at £425,000.00. The distraught purchaser asked our view, so we did a little digging and discovered that a previous similar sale not 6 months previously was at £375,000.00. A willing agent and over eager vendor is an easy excuse for such an increase in value but we did have a client willing to buy at that price. A 30% rise in 6 months is neither sustainable nor wholly credible.
Over in another part of Lewisham we have a client with a one bed conversion flat that went from £220,000.00 to £285,000.00 between May and October last year – in this case egged on by an agent, again an easy target but they did achieve the high figure. My client then found that the type of property they wanted to buy had increased by a similar percentage and priced them out of the market. Their natural response was to find a similar property in a cheaper part of town – along with everyone else – in this case Sydenham SE26 where we have seen a rise in survey instructions as others discover where there is better value. Demand rises and so do prices, which is presumably why Rightmove are currently reporting the easing of asking prices in traditionally pricey areas and the strengthening of prices in traditionally cheaper locations.
The story is a little different in Kent where the market is more uneven as far as we can see, but in prime areas prices have risen and many of the properties we look at are getting back to values last seen in 2008. We predict there will be a London effect as people move out of town to areas offering more square feet for your pound. Would you prefer a 1 bed basement conversion flat in East Dulwich for £300,000 or a 4 bed detached in Ashford for the same money? Or an equivalent one bedroom flat, in Hythe [by the sea!] for £160,000.00? That leaves a lot of unused mortgage money for the commute!
The agents who we trust and work with tell us that the mortgage market is easing and that more product is available, improving the number and quality of prospective purchasers. Demand is high but supply is low.
If we could accurately predict the market we wouldn’t be working! But we can provide our surveyors gut feel for 2014 – We expect London prices to stabilise in hot spots and to increase in the areas buyers will be hot in the future (Blackheath to Charlton and Brockley to Sydenham for instance).
We predict a rise in prices for the most desirable locations in Kent as London buyers either seek value or take advantage of higher prices to down size and buy second homes in the country or by the beach. We also expect other locations in the south east to continue to provide good value.
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