A decade in property: Local agents look back on 10 years of changes
- Credit: Archant
It’s been a tumultuous 10 years in the local property market. As a new decade beckons, Richard Burton spoke to agents about the changes they’ve seen.
Ten years ago David Cameron was limping into Downing Street propped up by the Lib Dems and hoping the property slump that had dogged Gordon Brown's government was a thing of the past.
Arab Spring had replaced Credit Crunch as the buzzwords of the day and Greece was the one with money worries.
Even so, the effects of the 2008 crash were still being felt as the new decade began against a backdrop of unemployment and falling incomes. The research group Hometrack were predicting prices would fall by one per cent. And by April the following year, the Bank of England was reporting that demand for mortgages had fallen for the fourth consecutive month.
Looking back, predictions were as reliable as an extension built by the bloke with a few bricks left from his "job down the road". It turned out to be one of highs as well as lows. Two years in, Britain hosted the Olympics and two years after that, Scotland voted to reject independence. But like onesies and selfie-sticks, the effects were short-lived as fortunes veered from one direction to the next. All of which left local estate agents having to negotiate what one described as a 10-year rollercoaster.
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One who's seen most of what a market can offer in his career is Mark Shearing, managing director of Putterills in Hitchin. He said: "It's been one of the most intriguing decades I've ever known. We've had myriad peaks and troughs to the extent that any ability we had to predict the market is now virtually non-existent.
"From 2010 to 13, we had a lull as prices more or less stagnated; very little activity. From 2013 to around the middle of the decade we saw more transactions as confidence grew and a slight upward nudge in prices.
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"The Olympics did help in a small way in terms of lifting the market but its effects were more in terms of the legacy it left areas such as the Lee Valley."
So is there a way of summarising the decade as a whole? "There were two big changes," he said. "We've seen the return of the first time buyer in the past three years, partly due to wage inflation, the fact that interest rates have been low and it's cheaper to buy than rent in this area - and increased downsizing.
"And the downsizers have been getting younger: the sort of people who came to areas like Welwyn Garden City in the '50s and '60s and may not be yet ready to retire but don't need a four or five bedroom house and want to release cash to top-up their pensions or help younger members of the family."
Steve Walker of Collinson Hall in St Albans felt that the first half of the decade saw the market "still reeling from 2008", despite feel-good uplifts from events such as the Olympics.
"For us, the biggest factor was what happened six months before Brexit with the stamp duty changes. In the sort of high-end market where properties of £1 million are not sub-prime the implications were huge. It took an entire section of buyers out of the market. And we're still feeling the legacy of that."
He added: "There have always been significant costs involved in buying a house and, while you can swallow them up in a mortgage, who would want to load it to pay tens of thousands for what many buyers would see as for no apparent reason.
"It meant that people were no longer inclined to look at a place and say, for example, we need a place with a garage, let's move. They'd stay put and hold off until they absolutely had to.
"Having said that, after a fairly quiet August and September this year, we had our busiest month of the year in October which does suggest the market is still there. In fact, in terms of volume, the numbers of purchasers and vendors was pretty evenly matched so that's a sign of a pretty stable market."
As for prices, they rose steadily throughout the decade with analysts at the Nationwide reporting a mere eight weeks after the 2016 Brexit vote that, far from halting the momentum, they'd continue to rise by 0.6 per cent.
At the same time, the TUC was reporting that wages had fallen 10.4 per cent in the years following the financial crisis, exacerbating the divergence between real wages and house prices. It estimated that by early 2015, the average price of a house was five times the average annual wage.
Another interesting insight was the way the demographics of home ownership had changed by mid-decade. While older people were more likely to own a home outright than they were 25 years earlier, younger people were having to wait much longer to buy their first house, a problem exacerbated by a chronic shortage of construction.
More recently, Savills were reporting much more modest rises of 0.2 per cent UK-wide with London, and increasingly the South East, seeing price falls.
And Rightmove reported this month that the number of properties coming on to the market was falling at its fastest rate in a decade, blaming the impending General Election.
It said there had been a one per cent fall since October, knocking £3,900 off the price of an average house. The number of new listings dropped by nearly 15 per cent, in what was the largest year-on-year slump in any month since August 2009.
The irony wasn't lost on director Miles Shipside who said: "Elections normally dampen activity as uncertainty causes a degree of hesitation, but this one is being called to try to break the deadlock."
Andrew Bradford of Bradford & Howley in St Albans was well aware of the ups and downs. "It's been a decade of highs and lows, something of a rollercoaster," he said. "But there has always been a market, even if it did stagnate a little towards the end. Activity levels, apart from a few months after the Brexit vote in June 2016, were fairly consistent to be honest.
"Overall, it could have been a lot worse. In fact, 2017 was one of our best years and 2019 actually looks set to be our best ever."
And the future?
"A lot of people have been holding back for some time now and at some stage all that will be released and the market will move again. Pivotal to that will be getting closure on Brexit - one way or another - and getting some stability in Government. But I'm always an optimist. As long as people are realistic in their expectations, and they generally are, there will be buying and selling."
Steve Walker was adamant in his view: "I'm pleased to see stamp duty under review. At the moment it's holding up the market. If we sort that out, a lot will change."
As for Mark Shearing, he saw good things for North Herts in particular, largely thanks to the way improvements to rail links would attract buyers.
"Hatfield's being refurbished, there's an extra platform coming to Stevenage and Welwyn Garden City have a makeover in the pipeline," he said. "All of which is backed by cleaner trains and more of them which has helped make the area attractive to commuters who see the main line as a better alternative to long commutes on the Tube. I'd go as far as to say, Hitchin is the new St Albans."