HOUSE prices are both a national obsession and a key driver of the UK’s consumer economy, writes Lucy Boon.
HOUSE prices are both a national obsession and a key driver of the UK’s consumer economy, writes Lucy Boon.
Those in the business have called 2014 a “year of two halves”, where the number of people buying and selling started off slow but then built up fast. Whether you are letting, buying or selling, we asked local estate agents for their views on the past 12 months, as well as their predictions on what is in store for 2015.
Nicholas Brown, partner at Knight Frank, said: “It has been an interesting and somewhat challenging prime market this year. It had a slow start but we saw transactional volumes increase in the second half of the year. There has certainly been an increase in activity in the last few months.”
This is a view shared by many local agents.
At Ballards, senior negotiator Oliver Symons said: “This has been a good year for the local housing market and we envisage this continuing in 2015. We were surprised to see constant demand across all price levels throughout the year with seasonal market trends becoming less apparent.”
Julian Sheppard, residential sales manager at Romans believes it is Henley as a location, and its low number of properties for sale, that has driven things forward: “Overall the Henley market is still very strong and, as ever, has been based on supply and demand. During 2014 there have been many more buyers than properties available, increasing property prices.”
Mr Symons agreed: “Whilst there has been strong demand in the local marketplace, the tempo is being dictated by the level of quality homes available at reasonable prices. I would recommend that any applicants searching for homes register with us, as property is more commonly being sold before it comes to the open market and as such will never appear on our website or Rightmove.”
Mr Sheppard points out the area’s appeal means some sellers hold out to get a higher price.
He said: “As a Thames-side town, Henley is very desirable and offers excellent commuter links with many of the local vendors only moving through choice rather than necessity. Therefore, there is a tendency for them to hold out for higher prices over a longer period of time in the knowledge somebody will eventually pay the price.
“That said there is always a responsibility in all types of market places for us, as agents, to value correctly to ensure prices aren’t inflated unnecessarily.”
Mr Brown agreed: “The confidence of buyers is still fragile and the prime market remains price sensitive.”
However, Matthew Mannall, office head and partner at Knight Frank, said: “The town and country market remains buoyant with many good sales across all price ranges to a wide variety of buyers.”
The company noted “some exceptional sales” taking place in the past 12 months including Highmoor Hall and The Old Museum in Hambleden.
Mr Mannall added: “The one sector of the market that seems to have been adversely affected more than most are those houses that are on or close to the river. Yet, so long as we have benign weather conditions over the winter and the first quarter of 2015 then we would expect this sector to improve.”
Trevor Michel, branch residential sales manager at Simmons & Sons, predicts the recent stamp duty reforms will effect sales in early 2015.
He said: “Given that Henley and its surrounding villages are a much more affluent area than the national average, buyers will be paying more in tax if they buy beyond the ‘tipping point’ [about £937,500] and this will undoubtedly affect buyers initially. However over the course of time the increases there will become absorbed into the negotiation process on both sides.”
Nick Warner, director at Savills’ Henley branch, said: “The market has performed well at this level, albeit prior to the stamp duty reforms. Our office has handled a number of high profile sales this year of premium property valued between £5 million and £10 million, including Greys in Rotherfield Greys.”
At the opposite end of the scale, Savills saw the sale of its smallest property of the year, a Grade II listed two-bedroom cottage near Wallingford with a guide price of £325,000.
In lettings, despite Savills reporting 2014 being challenging but, overall, positive in and around the Home Counties, its Henley branch has experienced its most successful year to date.
Savills head of Henley lettings Richard Maby said: “In Henley, transaction volumes are up significantly over the previous year. Most of the growth has been in the mid-range family market, echoing the feedback from all our offices over the wider Home Counties region. Demand has been very high for most properties up to about £4,000 per month, which encompasses town centre commuter apartments, family town houses, and country cottages in the villages.
“We predict 2015 demand to continue in the same manner, and with the forthcoming election likely to have a slight softening effect on demand in the prime sales market, we may see a return of demand for some of the larger country homes priced at about £4,000 per month.”
David Tate, joint managing director at Davis Tate, has had a similar experience in Reading, where the agency had “an almost un-stoppable flow of professional tenants”.
At Hamptons International, lettings manager Victoria Gray found in the past 12 months the balance between supply and demand, that kept the growth of rents in line with inflation over the past few years, has shifted. She said: “Demand increased and available stock fell in 2014. The number of new applicants registering to rent was 25 per cent up in October compared to last year, and stock levels were down 15 per cent.”
Interestingly, she gave landlords choosing to sell their rental properties as one reason for a lack of stock availability: “As expectations of future house price growth have shifted, more landlords are choosing to sell, reducing the available stock and ultimately pushing up rents. Forty per cent more landlords ended tenancies in order to sell their property in 2014 than in 2013. Meaning nearly one in 10 tenancies that ended this year resulted in the landlord selling.”
She went on to predict that the shift in the market, “means that in the short- to medium-term, the growth in rental prices for new lets is likely to exceed wage growth.”
Conversely, Romans found stock levels up, saying the Henley rental market has had a busy last quarter to 2014, with the number of tenants registering between September and December rising compared to the same period a year ago.
Lettings director Charlotte Mellor said: “Rental stock levels have increased within the town but tenants remain price sensitive, meaning we are yet to see any significant increase in rents. However, if stock remains at current levels and demand is sustained, prices could well edge higher in the first quarter of 2015.
“In light of this, tenants appear keen to sign longer contracts when securing a property with the average contract lasting 18 months.
“The rental option is still buoyant for families relocating and who want to rent before buying, as well as for professionals who want to be within an easy commute of London.”
Indeed, its proximity to London seems to be part of the driving force behind both high demand and high prices in Henley, and not only for lettings. Nicholas Brown at Knight Frank, said: “London-based buyers make up a significant number of capable and motivated purchasers in the area.”
So it is on to another year. The property market is such that it is constantly evolving and the good news is that everybody seems to think there is plenty of room for growth in the coming year.
Some estimate a conservative price increase of five per cent, while others estimate considerably more. Either way, things look positive.
Lucian Cook, director of residential research at Savills, said: “We expect the South East to see the highest levels of house price growth over the next five years and London the lowest, with buyers priced out of one, moving to the other.”
Mr Sheppard said: “Because buyers want to live in this area they end up paying for the privilege; I don’t see this really changing in Henley over the next couple of years and ultimately I believe prices will continue to be substantially higher than other towns in the South East.
“Even if prices do flatline by 2018 around the country, in my opinion it will probably not affect Henley as much and there will continue to be a relatively healthy property market.”
Any potential spoilers? Well, as the agents have already touched upon, there is the looming general election in the spring and a potential ‘mansion tax’.
Mr Symons explained: “There are some factors on the horizon that are creating uncertainty, including the upcoming election and the overhanging threat of mansion tax, but we anticipate demand in Henley and its surrounding villages will continue.”
Another potential spoiler is the ever-imminent increase to interest rates. However, according to experts, this is not likely to be before the second half of 2015.
Mortgage expert Ray Boulger of mortgage consultant company John Charcol said: “This time last year most economic forecasters were saying they expected one or two base rate rises in 2014, and now the consensus is for a rise in the third quarter of 2015. But my guess is that this time next year we are going to be talking about the first interest rate rise in 2016.”
What is more, with the recent stamp duty changes making it a little easier to jump on to the property ladder for 98 per cent of us, all in all, there are signs of good things to come.
“We’re expecting a little bit of a slowdown in 2015,” said Susan Emmett, head of residential research at Savills.
“That’s really as the market takes a breather.”
Mr Tate concluded: “For 2015, we expect the market to continue in the same strong manner.”
All in all, Henley’s local agents are looking forward to a very happy and healthy new year.
2015 STARTS STRONG FOR SAVILLS
HENLEY agents are already experiencing a positive start to 2015.
Savills reports the agreement of two good sales between the historically quiet Christmas and New Year period.
Director Nick Warner said: “Whilst still too early to predict what the first few months of 2015 will bring, we have already seen a positive start to the year. We agreed two valuable sales in the final week of 2014 and have exchanged on two more since January1.
“Most significant is the level at which these transactions have taken place — between £1.5 million and £1.75 million — a price point which has been impacted by the new rate of stamp duty which came into place on December 4 and which could have affected these sales but didn’t.
This goes to illustrate that purchasers are willing to buy and get on with life.”