After dark clouds, the sky is clearing. Last year was turbulent for the UK housing market, but it was particularly choppy in the capital. So is now a good time to buy?
In March, the Office of National Statistics reported that house prices in London grew at an annual rate of 7.3% in the year to January 2017, compared with 6.2 per cent for the UK. So, in January the average house price in London was £491,000 compared with £218,000 in the rest of the country. Despite the political unrest that is a solid return.
But that’s not the whole story, as James Sims, from Brik’s Fulham sales team states: “I think for the next 12-months the market’s going to remain pretty level. So, you’ve really got to make the most of it, especially if you’re looking to upsize because the market will move again, whether its next year or the year after, and when it does strengthen, it will come up very quickly. It happened in 2008: We saw 15-20% come off the market here, and it lasted for six or seven months. When it strengthened, it came back up very quickly. It might not happen in the same way, but when it does the market returns to a strong level of support.” This affect is more predictable in areas like Fulham where historically prices have been higher, and are seen as a safer investment than areas that have only recently become pricier.
This news doesn’t need to set you scrambling for your agents’ number, you still have time and as a buyer you are still in a fair position. “It’s a largely positive message,” reiterates James. “How we’re valuing it, and I know other agents are the same, is that we have seen corrections. And now houses are coming on at the correct price and there’s less of the uncertainty of last year.” Essentially the gap created by the political uncertainty between buyers and sellers last year is closing. Helped by the weaker pound and also the unpredicted positive economic horizon for the U.K. as a whole, post-Brexit. There still remains uncertainty but there seems to be a feeling that there is some certainty, at least, on how long it may last. This, along with some positive house price growth predictions in the next two years has led many buyers, and sellers, who have been sat on the fence for a long time to consider moving now.
With that in mind, and as we hit the spring buying season, here’s a deep-dive into three-different price brackets including advice and what to expect when hunting for a home in Fulham and Parsons Green.
You’re looking for a one or two-bed apartment, potentially with some outdoor space. In Fulham, this is around £100K under the average price for a flat, and as a first home, there will be certain things you’re looking for. “Everyone has different criteria and requirements,” says James. “But at this price, you’re looking for a sound buy, no structural problems and no issues with the lease, you want a long lease or a share of the freehold if you can get it.”
While it’s likely preferable at this price that you want to move into something with the minimum of work required, well finished, as they say, if some cosmetic work is required and you have the budget, it could be a wise idea. “Work wise, it depends on the price,” says James. “But you want to be looking at it as an investment: does it have the potential to add value? £700k is entry level in Fulham, so first time buyers are usually looking for convenience – distance to the tube, condition, anything with major structural or lease issues scares off a lot of first time buyers. The lease is the key thing.”
Moving up in both building size and price, you’re now probably looking at one of Fulham’s and the surrounding areas’ beautiful Victorian terraces that sit on pleasingly tree-lined streets. Many of the same rules apply as for the flat, but you now have the added possibility and reality of having a family, which brings up its own set of considerations.
“Again, this is all about location and size,” confirms James. “The closer you get to the tube, the more you compromise on space. Most buyers will be either coming into the area for the first time, or will already be here and are looking to upsize from a flat to a house. So, they’ll know the area and will be looking to balance location, proximity to schools, number of rooms and what you get at that price-point. Again, any structural defects and the potential to add value to the house will, and should, be key factors for any buyers. You don’t want to be buying a new house again in three years time if you grow out of it, so look for the possibility of an extension, or going into the attic or a basement.”
If the house you’re looking to buy does have potential for expansion, or you know you have a new family member on the way, it is possible to get started on things like planning permission a lot earlier than you might think. “Most buyers will look to get planning after purchase,” says James. “But there are some instances where, for example if there’s a chain, some buyers might request after exchange that they be allowed to have drawings done and plans for permission drawn up. That way, during the few months between exchange and completion, they can steal a bit of a march on that. Planning can take some time to come through the channels. Once exchange has happened, it doesn’t make a huge amount of difference to the seller. They’d have couple of additional visits from surveyors and architects and such, but I think most sellers would be amenable to that, especially at this level.
The upper end of the market has remained quite slow, and with Central London becoming less appealing, the much sort after houses in locations such as the Peterborough and Moore Park estates are even more highly sort after prizes. “Clients have moved from Knightsbridge, Chelsea and Notting Hill in search of more space,” says James.
One of the other major concerns at this price bracket is the cost of stamp duty. “At £2.5/3m plus,” says James, “if someone has a second home it’s going to be even more. We launched a house recently with a stamp duty of £370,000. People need to be very clear about what they want to buy, and they need to be able to add value to the house. They’ll be committing to a large amount of stamp duty so pressure to get it right has become even greater. A 5% fluctuation in price at this point is a lot of money. But this market is coming back.
At this price, it is perhaps fair to say that sellers are equally, if not better placed to be calling the shots during any negotiations. “There’s more confidence,” says James of the market, “but since the correction last year, it’s still a quite a lot of money to consider. So, I think a lot of people will just stay where they are, put some of the money towards a basement conversion, save on the stamp duty and add 1000sq ft.”
It seems that Fulham property, after softening for several years may be returning. Even if it appears to be re-bounding in slow motion, that could change very quickly. With limited stock of quality houses in the area it is likely, but not certain, that the best buys are probably to be had now before the market returns in full swing post-Brexit. Happy hunting.
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