Date 21 July 2011
From time to time we like to include within Stay Alert! the views of some of our contacts and clients, this month I sought the views of a number of local agents on the current state of the residential property market and John Moore spoke to Mark Buddle at Bidwells for his thoughts on the residential development sector.
Mark Buddle (Partner – Residential Development) – Bidwells, Kings Langley –
“The performance of the residential land market has mirrored that of the national economy.
The recession had a detrimental impact on the house-building industry, with land values being reduced in some areas by up to 70% from their peak. The introduction of the Localism Agenda by the Coalition Government has threatened to add further uncertainty to an already fragile sector. Many Councils have simply put on hold progress on their Core Strategies until after the Localism Act has been passed (expected later this year) and the Regional Spatial Strategies have been fully (and lawfully) revoked. This delay has caused the market to remain constrained by a fundamental shortage of land coming through the planning system.
Land values are being supported, however, by the shortage of development land. This has been exacerbated rather than eased by the Localism Agenda. Furthermore, due to restricted debt finance, cash flow is a fundamental concern for the house-builder, which has resulted in both increased market activity and demand for immediate and short-term development opportunities.
The inherent lack of land supply for traditional family housing in high value areas has ensured that land values in some prime areas for schemes under 300 dwellings (generally requiring limited upfront infrastructure) are achieving levels similar to those witnessed at the height of the market.”
“The local market is still strong particularly for family properties close to the station or good schooling and we are regularly achieving prices very close to and sometimes in excess of the listed price.
London buyers attracted by the short commute and schooling find local prices good value despite the fact that we live in an area where prices far exceed most areas outside of the Capital. Many local families are looking to move with decisions on future schooling requirements at the top of their list.
In the last quarter we have also seen renewed activity from investment buyers taking up some of the slack from first time buyers.”
Simon Elliott (Branch Manager) - Haart Estate Agency, Luton -
“The market is still price sensitive although applicant levels remain high as do viewing numbers.
The property stock that is correctly and realistically priced gets immediate interest and often sells within 3/4 weeks and sales are typically agreed within 2 - 5% of the asking price which when a seller is buying on will be relative when they agree their own purchase.
June was our busiest month for some time with over £4,500,000 of house sales ranging from £40,000 to £400,000 so buyers are buying at all levels. However the current market is all about being proactive. At Haart we are constantly calling our clients about new and reduced stock and this along side innovative marketing is proving to be a successful combination.”
Alex Sewell (Managing Director) – Sewell & Gardner, Watford –
“The Watford and Rickmansworth market remains stable on prices and has done for the whole of 2011. We have had a drop down in applicants registrations of around 10% but I suspect this is down to the private schools breaking up and the holidays approaching rather than any significant change in buyer confidence or ability to purchase.
Instruction volume remains steady but we have a higher percentage of ‘churn’ properties (coming to us having already been on the market) rather than fresh instructions. Prices need to be realistic as buyers will scour the market for all properties in their price bracket and will not over pay for properties, even if they fall in love with them. The head always rules the hearts in the current market conditions.”
If you would like to contribute to a future edition of Stay Alert! please contact your normal SA Law contact or Gary Dunger on 01727 798020 or gary.dunger@salaw.com