James Morton, Director of Benham & Reeves Estate Agents, responds to press coverage of yesterday’s RICS report which showed London house prices are falling
This week’s statistics from the Halifax and the RICS, and the coverage that followed certainly made sobering reading for estate agents and property owners in the capital.
Their industry survey revealed that despite modest growth in house prices across the UK, property prices in London, and particularly those in more desirable areas with a £1m plus price tag, are still seeing falling prices. According to the report, London estate agents are having to discount asking prices by 5-10% in order to sell.
You could be forgiven for thinking that as a buyer, you can waltz in to the office and knock 10% off everything you saw in the window. In actual fact, nothing is that clear cut. House prices are not what they were, but we’ve been in this situation for 2 years now – and where sellers are accepting offers of 10% less than the asking price, the estate agents have almost certainly allowed for this in the asking price.
The sensationalist reporting we are seeing is at best, unhelpful, and at worst, adding to the problem and making it seem worse than it actually is. We’re still seeing properties move reasonably quickly, because most estate agents are fully aware of the market conditions and making realistic valuations – and some of the sealed bids we’ve had since Christmas have been above, not below the asking price, although this tends to be down to a combination of attractive pricing strategies and our marketing experience.
It’s no secret that property taxes are the biggest threat to the UK’s £1m+ property market. It’s also well known that I have strong feelings about the ridiculous levels of stamp duty that London buyers are saddled with, and I won’t stop calling for change in that respect. With new rules being planned to penalise offshore commercial property buyers with capital gains tax, too, one wonders whether anyone in Whitehall has a clue about the London property market at all. Let’s just say that if a Minister walked into ‘The Spaniards Inn’, I doubt an estate agent would be buying his first pint.
However, desirable areas around Hampstead Health will continue to thrive, simply because people want to live here, so these leafy areas of North West London still represent a good long-term property investment. By trusting an established agency like Benham & Reeves, with 60 years experience in property marketing and offices in the heart of these sought-after locations, sellers are more likely to achieve the best possible price for their property.
I wouldn’t write off the rest of the Capital either. Proud Londoners have seen off the Plague, we came through the Great Fire of London and we survived the bombs and air raids of World War Two. We’ll come through the new plague of property taxation, Brexit and bad decisions from this Government, and as now, in fifty years time, we’ll walk through our parks in the footsteps of historical giants.
We Londoners are pretty robust – but we are also just like any other property owners. We’d far rather the price we paid for living in this beautiful area was reflected in the price of our properties rather than discounted to cover the huge taxes people have to pay to buy them. Surely that’s not much to ask?