The excitable state of the top end of the Central London property market is causing estate agents to reach for the metaphor. Observing voracious buyers jostling for the few available properties in the most sought-after postcodes, one agent commented: “It’s a feeding frenzy out there. There is a wall of money in search of the right type of place.”
There are a number of different reactions to this assessment. The cynical will see such descriptions as estate agent hyperbole. Others will simply hope that the exuberant spirit of the metropolitan market spreads out from Notting Hill to the rest of the nation. A few pessimists will declare that rising demand in the capital is a precursor to an unsustainable house price spiral and a subsequent slump. These types swap such prophesies of doom at www.housepricecrash.co.uk, the online home for the inveterately gloomy.
But, whatever your response to the news from the capital, you are likely to feel some curiosity about the prospects for your neighbourhood. In Kensington and Chelsea, the typical buyer is a Roberto Cavalli-wearing second wife of a Russian billionaire, or the recipient of a large City bonus. What is the mood among buyers of more modest means? The latest surveys from Hometrack, Nationwide and The Royal Institution of Chartered Surveyors (RICS) supply some insight and some pertinent statistics.
Hometrack shows prices rising by 0.1 per cent in January; Nationwide reports a dip in February of 0.2 per cent, after a 1.5 per cent increase in the previous month. Richard Donnell, of Hometrack, and Greg Fuzesi, of Nationwide, are both reluctant to predict trends for the rest of the year. But they have something to say about attitudes.
Donnell believes that buyers will continue to be picky and price-sensitive. Fuzesi feels that some people will delay moving because they are apprehensive about the economy. He points out that many aspiring first-time buyers will not become owner-occupiers unless they have generous parents.
This issue of cross-generational subsidy is significant for the future of the housing market. Will mothers and fathers help their children on to the ladder, or commit any spare savings to their own depleted pensions? The RICS is more upbeat, noting that the number of completed property sales in January was 15 per cent higher than a year earlier. Purchase inquiries rose in January for the eighth month in a row, the longest period of expansion in the RICS’s survey history.
Most housing market commentators agree that price growth in London and elsewhere can mostly be attributed to a shortage of supply, but there is little accord on whether rising prices will entice more people to put their homes up for sale, so testing the improved health of the market. The RICS puts its faith in competitive fixed-rate mortgage deals. But, at Hometrack, Donnell suspects that there could be less “aspirational moving” because people are now “fixated” on total housing costs, which include mortgage repayments, stamp duty, and utility bills that are now rising steeply. When viewing a larger house, people are asking not only: “Do I like it?”, but also “Can I afford to heat it?” This is the kind of question that the Russian billionaire’s wife is least likely to pose. It will be interesting to observe whether it will also be the first thing on the mind of the average buyer when the weather improves and spring turns minds to new homes.
AMERICAN linguistic habits are now commonplace in the UK. Even traditionalists can be heard to say: “I’m, like, cool about that”, or “Hey, that works for me.” So far, however, the practice of describing properties by reference to their floor area, rather than the number of bedrooms, has been slow to infect British speech.
But there are signs of change. In a new piece of subtle middle-class one-upmanship, families who want a four to five-bedroom home say: “We, like, need a place with 2,800-3,500 square feet.” At the exclusive end of market, square feet is, like, the lingua franca. This week, Glentree, the estate agency, claimed a record with the sale of an opulent Knightsbridge flat. The 6,500 sq ft five-bedroom property changed hands at £15 million, or £2,300 per square foot. The going rate in the area is about £1,500-£2,000.
Within its 6,500 sq ft, this duplex flat offers what used to be called “ample accommodation”. In light of this, we can all understand why authorities in many parts of America are now contemplating a ban on McMansion houses of 72,000 sq ft. Aspen Colorado wants a 15,000 sq ft limit — which equates to a residence about a quarter of the size of the White House. Supersized houses, with their spoilt occupants and supersized staff, add to traffic and put a strain on local gas companies.
Fortunately, the lack of space in Britain means that this is one part of the square feet trend that will not be coming here.
