Are property prices going up or down?

Keith Mitchell, a founding partner of Templeton Robinson, said that UK-wide housing statistics should be ignored by potential house buyers, claiming that such reports could damage the “fragile confidence now developing” among potential buyers in Northern Ireland.

Financial experts have predicted further turmoil in the housing market as job losses and repossessions mount during the recession.

But Mr Mitchell, attacking those predictions, said that the situation in England, Scotland and Wales – where values rose over a longer period of time and would therefore take longer to readjust – had been very different to that in the Province.

“In Northern Ireland our prices exploded over a short period of time and have reduced just as quickly,” he said.

“In our view there is therefore no basis to suggest our values will become further depressed.”

Meanwhile, the latest monthly survey from the Royal Institution of Chartered Surveyors (RICS) will today reveal that fewer surveyors are reporting falling prices.

Almost half of chartered surveyors reported no drop in prices in January, down slightly from 59 per cent the previous month.

RICS Northern Ireland housing spokesman Tom McClelland said that while the Northern Ireland price balance remained strongly negative, it had improved markedly in recent months:

“Northern Ireland chartered surveyors are widely reporting a rise in inquiries from potential buyers and the survey indicates that they are increasingly confident that transaction levels will grow in the months ahead albeit from very low levels,” he said.

In October, Dr Graham Gudgin, a former economic advisor to the Assembly and now senior economic advisor at Oxford Economics, said that he believed Ulster prices would fall for about another year.

And City of London financier Jonathan Davis, who predicted the current property crash when most local estate agents were still predicting prices would keep rising, has said that Ulster house prices will fall by an average of 50 per cent, meaning that some of the most overpriced properties would fall by 80 per cent.

A property expert has suggested that landlords should be responsible for checking if their contracts with estate agents contain renewal fees.

Tom Entwistle, editor of letting advisory portal Landlordzone.co.uk, disagreed that legislation should be put in place to prevent both estate agents and letting agents from putting clauses in contracts that could require landlords to pay commission fees for specific actions.

He noted that some letting agents might invoke a clause that would enable them to receive a sales commission if the landlord sold the property to its tenant.

But on whether such practises should be ruled out under law, Mr Entwistle said: “I don’t think so because it is a commercial arrangement and it is up to the landlord to be aware of that.”

It comes after a survey by the National Landlords Association last month revealed that some landlords in London and the south-east are being charged for renewing agreements to let out properties to their tenants.

For at least a year it seemed to be a term that had disappeared from the lexicon. Yesterday gazumping was once more heard passing the lips of that endangered species, the estate agent.

On the day the Bank of England cut interest rates to their lowest level in British history, to combat the worst recession since the second world war, some estate agents in London were claiming that prospective property buyers were again entering into last-minute bidding wars to secure the home of their dreams.

Charles Peerless, manager of the West End and City branches of Winkworths estate agency, said: “We’ve had gazumping on two lower priced properties – around the £360,000 mark – in January. “We had abuse from the buyers because they think the market is dreadful and they couldn’t believe they had been outbid.”

Ed Mead, director of London agents Douglas & Gordon, said the company’s Wandsworth branch had seen one buyer try to gazump another by £50,000 after a bidding battle pushed the price on a property from £800,000 to nearly £900,000. The vendor went for the lower bidder in the end as he was offering cash,” he said.

Other estate agents were reluctant to use the g-word, but claimed they had seen some of those elusive green shoots of recovery.

The Guardian contacted more than 15 estate agencies around the country yesterday, and most reported a surge in inquiries from first-time buyers and an increase in sales in some areas.

Max Sowerby, an estate agent in Norfolk, said: “Before Christmas we had no customers coming through the doors, but in the last five weeks it’s been so much better. We’ve been selling houses again.”

But the upbeat message was not uniform across the country. Bill Preston, owner of Prestons estate agents in Porthcawl, south Wales, said: “Everything’s still exactly the same as last year.

Sales of super-prime property in central London have seized up as house prices have plunged and cash from City bonus-earners has evaporated, figures from estate agents showed yesterday.

Knight Frank, the agent, said that the number of homes for sale worth £10million or more had fallen by 34 per cent in the past 12 months as the downturn had dissuaded owners from selling.

Savills, another agent, said that transactions at the typically resilient “international billionaire” end of the market had plummeted, adding that it expected the market in prime areas including Mayfair and Knightsbridge to tumble in the absence of cash from City bonus-earners this year.

Liam Bailey, head of research at Knight Frank, said: “It appeared for some time that the super-prime sector might be immune from the credit crunch. It is now apparent that it is not immune. Prices peaked in August 2008 and have now fallen sharply.”

Savills said that the amount that flowed into the property market from bonus-earners in 2008 was an estimated £600million – 17percent of a total bonus pot of about £3.5billion.

The agent said that although it expected this figure to rise slightly to £800million of the £2.7billion pot due to be paid out in 2009, the forecast is still way down on the £3.19billion in bonuses that City workers ploughed into property in 2007 – worth almost 40 per cent of the £8.5billion in bonuses they earned that year, according to figures from the Centre for Economics and Business Research.

Asking prices for prime property in central London rose for the third successive month in January by 1.2 per cent, according to Primelocation.com, the website, adding £16,106 to the price demanded for the average prime home. This was against a 7.3per cent fall in average national asking prices recorded by Rightmove last month.

Tags: gazumping in london, mayfair properties

Category: Property News