CHRISTMAS has come early to the offices of many estate agents. But no-one is
prematurely downloading festive party hits onto their iPod or putting up the
decorations. For, in some locations, the seasonal lull that usually
overtakes the housing market in mid-December arrived in mid-October.
Inquiries from buyers, sales and new instructions are all down, according to
the Royal Institution of Chartered Surveyors’ (RICS) monthly interrogation
of its members. The boss of one firm in Frome, Somerset, even exhorts his
peers to “go out to your vendors and lower their expectations”.
Others are more sanguine. The RICS survey includes accounts from Battersea,
Edinburgh, Harrogate, Lincolnshire and South Lakeland of healthy interest in
realistically-priced properties.
Meanwhile, status homes almost everywhere seem almost immune to the sub-prime
malaise that has spread from the US, cutting off the supply of easy loans.
Cheap apartments in Liverpool may have little pulling power, but the £1.5
million penthouses in the city’s hip new Unity building have become the
latest rich boys’ toy and not because the tower’s architectural style has
been likened by some to Lego.
Even the most downhearted RICS members do not report any panic selling,
confirming the suspicion that there lies ahead not a price slump but a
period of stagnation, with the number of transactions subsiding.
Meanwhile, after the signal from the Bank of England that interest rates could
be cut next year, some people are already looking beyond the slowdown,
trying to spy out the locations that could be the first to start moving
upwards again – or become the next hotspots. Savills research out today
cites Cricklewood, Tulse Hill and White City as the next candidates for chic
urban village status.
There may be predictions of further deterioration in the US housing market:
sub-prime problems are emerging even in affluent suburbs, with white-collar
worker homeowners becoming unable to meet their mortgage repayments and
facing repossession. But UK investors with strong nerves are seeking
bargains in Arizonia, California and Florida, as we report on pages 6-7.
These are the states in which prices collapsed first and so could be those
where prices first stabilise.
There is, of course, also potential for further falls in the values of
properties such as one Florida condo, marketed at $440,000 two years ago and
now for sale for $275,000. But, thanks to the dollar’s decline, the price of
this condo to a British buyer is £137,500, and there will be many who think
all their Christmases have come.
CHEQUES AND BALANCES
The price of oil is a controversial subject, which may be why the Government
has not yet used the rise to nearly $100 a barrel to highlight the value of
the energy performance certificate (EPC). This is the key component of the
home information pack (Hip), which must now be supplied when a property of
three bedrooms or more is put up for sale.
The EPC grades a home’s energy efficiency, giving it a grade from A
(faultlessly eco-conscious) to G (environmental menace), which a purchaser
should use to assess a property’s running costs. The EPC should be
particularly useful as a guide to the bills for one of 3.5 million country
homes that use oil for heating.
But a letter to The Times from a trainee domestic energy assessor,
the person who compiles the EPC, suggests that buyers should beware. This
would-be assessor discovered on her course that no checks were made as to
whether the details of EPCs submitted by students matched the properties
involved.
These disclosures will increase the scepticism that already surrounds the Hip
project. The EPC was designed to help to save the planet. It would be a
shame if it acquired the reputation only of yet another piece of
bureaucracy.
TOO MUCH COFFEE
One of the unexpected aspects of my job is an overexposure to beige. The
interiors of properties in high price brackets are now almost all decorated
in the Starbucks palette of latte, mocha and cappuccino. This decor,
influenced by the styling of deluxe hotels, is designed to create a neutral
background onto which a potential buyer can project his or her own
personality. But it will be interesting to see whether this cool and
anonymous look will survive the new trend for staying put: new Capital
Economics’ research indicates the tendency to move less was becoming more
pronounced even before the market slowdown.
Marks & Spencer seems already to have calculated that the spread of
staying put could lead to demand for more colour and warmth. The chain’s
spring and summer 2008 homewares collection, unveiled this week, featured
red, blues, greens and even some patterned upholstery, alongside the
mochachino. If beige does give way to colour, you will be the first to know.
anne.ashworth@thetimes.co.uk
Anne Ashworth, you do little credit to your usually excellent articles by frequently quoting the thoroughly discredited Capital Economics. Their reports have been proved to be worthless.
Richard, Shanghai, China
I've been reading your articles religiously for the last three years, you are definitely an optimist and I would guess from your articles a multiple home owner.
Let’s take the gloss off this article. I hope these people waiting in the ranks realise that they won’t be picking bargains but more to the point an asset with a ‘real’ value. I’m sure your can apply the same theory to buying banks shares in the current markets. Or is the author suggesting that any big fall in house prices are not rational or backed by fundamental economics.
It was speculation that drove house prices to the obscene levels we have seen, it’s the fundamentals kicking in that form reality not bargains.
dan, wellington, nz
"...some people are already looking beyond the slowdown, trying to spy out the locations that could be the first to start moving upwards again."
Flogging a dead horse? Very amusing indeed but not to be taken seriously. The market is just starting to fall so why even bother to concern yourself with buying again? Safer to forget all about it for a year and grab the 6.5% thankyou very much!
So pleased I'm not an estate agent.....anyone want to buy a Porsche?
George, Aylesbury,
In current conditions, i can't see many people willing to buy "£1.5 million penthouses" (read top floor flats) in Liverpool. The reality of paying such an excessive amount for a flat will sink in. You can buy huge mansions for that amount of money.
Anyway what you property people seem to forget, the BoE task is to use interest rates to control inflation, not to help a housing market that has blown itself into one of the biggest speculitive asset bubbles ever. 'Stagflation' is also wishful thinking.
Paul, Camberley,
And Harry Potter is a real boy.
Ethel Al Qaeda, Leamington Spa,
Rate cut, haa ha ha, you are funny
David, London,
"...some people are already looking beyond the slowdown, trying to spy out the locations that could be the first to start moving upwards again."
what are you smoking.
jyoti, london,
"..some people are already looking beyond the slowdown, trying to spy out the locations that could be the first to start moving upwards again."
Hilarious. Absolutely hilarious.
G Ratner, London,
Interested to see your assessment of prime locations and trying to figure out where South and West Hampstead sit in the pecking order. They do not appear in the main list and WH only gets a mention in dispatches as it considered more desirable then Kilburn! Whilst I wouldn't expect them to be quite as high up the order as Hampstead there are a lot of areas which are mentioned that are not in their league.....guidance needed please, Paul of West Hampstead.....
Paul, London,
"...some people are already looking beyond the slowdown, trying to spy out the locations that could be the first to start moving upwards again."
Thank you, I have pinned this on my wall. It has made my day.
Sidney James, East Cheam,