I had an interesting conversation with a local Hersham
accountant the other day. He is quite an observant chap (I know this because I
have known him for a few years... but I suppose you have to be to be an
accountant!). Anyway, he mentioned a few things he had noticed recently in Hersham,
one that Hersham property prices had gone up in the last few years but nowhere
near the growth levels that were being achieved in central London, and
secondly, that he thought the number of For Sale boards in Hersham (and more
importantly ones with sold slips on them) had increased over the last couple of
years.
The rate of house price inflation in Hersham continues to
slow with growth of 12.4% in the 12 months to February compared to 14.1% just under
six months ago, according to the latest Land Registry data. However, there is
considerable variation with house price growth ranging from 14.5% in Bracknell
to 17.1% in Hillingdon over the last 12 months.
Whilst Hersham hasn’t seen the 20%+ per year in house price
growth of London over the last couple of years,
Hersham has seen a sharp uplift
in the number of properties sold throughout 2014 as base line demand for housing grows,
which suggests there is substance to the recent pick-up in house price growth
in the town. Since the Second World War in the UK, when the number of
properties sold had grown, property values grew soon after. The 4.81% uplift in
property transactions in Hersham in 2014, compared to 2013, indicates the most
significant recovery in house market activity in Hersham (outside London) since
2007.
When you compare Hersham with London, you could be looking
at two different countries. In London, its mid/late teens house price to
earnings ratios are impacting demand (i.e. the average property value is often
15 or 17 times the average wage in London... in fact in Knightsbridge the ratio
can be 30 to 1). However, the number of people wanting to sell has dropped
considerably, meaning that falling sales volumes combined with a general
slowdown in activity in the run up to the General Election are resulting in
lower mortgage approvals for home purchase.
Transactions are a great indicator for house prices. The
acceleration in house price growth in London in the last two years was preceded
by three years of rising transactions. A similar pattern is being registered in
the Hersham area, as pent up demand returns to the market supported by low
mortgage rates and an improving economic outlook.
But before you get the Champagne out, while the uplift in
activity is welcome news, the number of Hersham property sales in 2014 is still
22.3% lower than the level seen in 2007 and property values are 4.7% above the
2007 levels. The ongoing housing recovery is far from broad based and remains
focused on middle to higher value areas within Hersham where households have
equity and find it easier to access mortgage finance. If you want to know more
about the Hersham Property Market, please visit the KT12 Property Blog www.waltonproperty.blogspot.co.uk
or send me an email to marcel@rochills.co.uk.
.JPG)
