Berkshire and Buckinghamshire property market 2015 - what's in store
PUBLISHED: 15:18 05 January 2015 | UPDATED: 15:18 05 January 2015
Overall, the 2015 outlook's still bright for the local property market, although those with a £2m+ home might notice a slow-down in interest
Most estate agents in Berkshire and Buckinghamshire will tell you that 2014 started off in a whirlwind. More owners put their properties onto the market after several years of holding back and buyers were eager to snap them up. At the same time low interest rates and government incentives helped first-timers get a foot on the ladder. Indeed, the Nationwide House Price Index shows that average annual house price growth reached 11.5per cent at the end of the second quarter of 2014. The second half of the year saw a bit of a slow-down, however. As Peter Coles, Group Managing Director at Romans put it: “From the frenetic conditions of the first half of 2014 the market has settled into a much more balanced, and therefore sustainable, level of activity.”
Tim Russ, of Tim Russ & Co, with branches throughout Buckinghamshire, is an agent who’s also looking forward to a more settled market. “With the United Kingdom remaining united after the Scottish referendum, we have a period of stability before the run in to the General Election next May and I expect the market to be buoyant during this period,” he says.
Fionnuala Earley, Director of Residential Research at Hamptons International, agrees that the rate of house price growth in 2014 has been a little higher than expected. She says: “Prices have been driven largely by London and the South East, but a change in sentiment over the rate of future price growth has affected the whole of the country and we expect that to result in a moderation in house price growth next year.”
While many welcome a more moderate level of activity in the market, some Berkshire and Buckinghamshire agents do have a few words of caution for those on the upper rungs of the housing ladder. One of them is Charles Elsmore-Wickens, Head of Savills Windsor sales. He says: “The latest statistics from our industry leading research department have indicated that the prime regional and country house markets have lost some of the momentum seen in the first half of this year.”
He goes on: “Despite an improving economic outlook, the current market sentiment is being attributed, in part, to the effect of the higher rates of stamp duty introduced in 2012, specifically at the £2 million mark, and has been compounded over the summer months by the Scottish referendum and ongoing political discussions surrounding mansion tax.”
It seems that even though the underlying fundamentals of the market remain sound, speculation about interest rate rises and pre-election rhetoric around a mansion tax and other ways to tax high value homes, is in danger of suppressing the potential for further growth in the short-term.
However, Charles says the market for properties priced between £500,000 and £1.75 million remains strong, with continued interest from those migrating out of London. And he adds: “Those serious about buying can still purchase safe in the knowledge that the prime market in Windsor and its surrounding villages offers incredibly good value relative to London, and this will drive price growth over the longer term.”
Savills researcher Sophie Chick believes that those with more expensive properties need not worry unduly. “Assuming there are no further changes to the taxation of high value property, our outlook for the prime markets remains positive,” she says, adding: “We expect the suburbs and commuter locations to see the strongest growth as homeowners continue to make the move out of the capital.”
For more mainstream properties, however, the future for homeowners in Berkshire and Buckinghamshire remains rosy. While the market might have slowed slightly as more stock becomes available, London buyers are still keen to put down roots in the two counties. ‘Escapees’ from the city are an important source of demand for commuter locations like Amersham, Beaconsfield, Windsor and Reading, and have contributed to the strong growth seen in these markets.
In fact values throughout the commuter zone saw annual growth back to or above the 2007 peak levels, according to Savills.
At the other end of the scale, it looks like first time buyers will continue to take advantage of the ongoing low interest rates and government support schemes, although they’ll be competing with investors, who want to take advantage of the April change in pension rules. Smaller properties in desirable areas will be subjected to increased competition in this sector.
Romans’ Peter Coles does, however, have some words of wisdom for those on both sides of the property market. He advises against speculative pricing, warning that it can not only delay the entire sales process but can often result in an even lower sales price being achieved because of the stigma associated with a property that has been on the market for a long time, or had its price reduced.
While buyers have more choice, Peter says that if you see something you like, the chances are you won’t be alone in your interest. “We’re advising buyers to avoid any unnecessary prevarication or you will simply be pipped to the post by others buyers,” he says, adding: “On the matter of price, unless a buyer has robust evidence that an asking price really is unrealistic, then to avoid missing out to a better offer I’d advise against quibbling too much, if at all.”
So, while the overall message for 2015 is positive, there are a few caveats. While the recovery is likely to continue, its pace will be much slower because of several competing issues. But there is an upside. With price expectations moderating, the incentive to buy quickly will lead to a reduction in demand. However, for those wanting to sell at peak prices, now could be the time. If this leads to an increase in stocks of existing property for sale, it should help boost liquidity and the level of activity.
Although according to housing market analysts at the Centre for Economics and Business Research, average house prices in the UK will fall by 0.8 per cent in 2015, it seems that Berkshire and Buckinghamshire will continue to thrive. Peter Coles, for example, predicts a local increase of five to 10 per cent during 2015. The upper end of the market is likely to see the lower increases with the smaller one and two bedroom properties enjoying the bigger rises. A lot of this demand will stem from first time buyers competing with investors.
And as for the general election upsetting the property apple cart? Most agents aren’t worried. As one of them put it: “Regardless of what the election outcome is, people will always need to move home and buy and sell property.”