Potential supply glut causes anxiety for buyers in the W3 area
A house on Montague Gardens sold for £1,700,000 at the end of last year
The average sale price of a home sold in Acton surged to a new all-time high at the end of 2020 according to the latest official figures.
The top line number is misleading however as it is mainly a function of the collapse in demand for flats. Only 19 were reported as sold by the Land Registry in the final three months of the year. Although this number may rise as more sales are registered it is likely to remain well below normal levels.
At the same time the demand for larger properties appears to have remained relatively robust. Some of these appear to be Homes in Multiple Occupation but family homes above the £1,000,000 mark remain in demand.
A terraced house on Baldwyn Gardens sold for £1,613,400 and two houses on Montague Gardens reached high prices with one of them going for £1,700.000
The combination of these two trends resulted in the average sale price in the last three months of the year increasing by 24.8% compared with the same period in 2019 to £717,732, the highest quarterly average on record. With only 33 properties changing hands it cannot be said with confidence that the average sale price is an accurate reflection of the true state of residential property in the area.
The health of the market for flats is causing some industry participants concern. The huge development along Bollo Lane for which TfL recently won approval will add over 800 flats to an already full development pipeline for the area.
One local agent said, “These numbers shouldn’t be a surprise as demand for flats has been patchy for a while. Rents are softening a bit and many people have not been tempted by the stamp duty holiday. That said it is hard to see demand improving after the extension. The constant news about new developments doesn’t really help as it is hard to argue that there will be much price upside due to all the supply in the pipeline and many potential owner occupiers are anxious about capital values. It is also worrying investors who are concerned about yields being hit if supply drives down rent.”
|Acton Property Prices (October - December 2020)|
|Change in Quarter||-5.3%||-60.0%||54.4%||-25.0%||-1.2%||-64.8%||8.9%||-60.2%|
|Change in year||19.7%||-46.7%||24.0%||-60.0%||5.2%||-74.7%||24.8%||-69.2%|
|Change in three years||5.4%||-42.9%||39.4%||-66.7%||11.2%||-71.6%||15.6%||-67.6%|
|Change in five years||15.1%||-27.3%||22.4%||-81.8%||7.7%||-80.8%||25.6%||-77.2%|
|Change in ten years||81.3%||-65.2%||117.8%||-73.9%||84.5%||-78.2%||97.6%||-75.7%|
The Nationwide House Price Index for January showed that the annual rate of increase i slowed to 6.4% from 7.3% in December, while average house prices have fallen by 0.3% month-on-month, from £230,920 in December to £229,748 in January.
Robert Gardner, chief economist at Nationwide, said, “To a large extent, the slowdown probably reflects a tapering of demand ahead of the end of the stamp duty holiday, which prompted many people considering a house move to bring forward their purchase. While the stamp duty holiday is not due to expire until the end of March, activity would be expected to weaken well before that, given that the purchase process typically takes several months (note that our house price index is based on data at the mortgage approval stage).”
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February 10, 2021