The mini house price boom witnessed in 2009 and during the first half of 2010 was never going to be sustainable, largely because it was due to a combination of low interest rates and a scarcity of stock, rather than a confident market. Recent monthly house price statistics prove what most experts suspect, that the house price recovery has run out of steam for the time being - and there is every likelihood that 2010 will end up being a flat year for the housing market.
That’s the bad news. The good news is that what we have also seen in recent months is very strong evidence of a two-tier market developing, with the top end of the market showing tremendous resilience to the caution and uncertainty infecting the mainstream market. While prices as a whole have been retracting, the top-end of the market has experienced strong demand from buyers, and prices have held up in what is a very tough economic climate. What this does prove is that top quality stock will still sell at a premium even against the backdrop of difficult market conditions.
In fact August, which is typically a quiet period for Carter Jonas and the housing market in general, bucked the trend and transpired to be one of our busiest months of 2010. Sales fee income this year to date is already up 10 per cent on the same period last year. The £5million plus super-prime market, in particular, has performed exceptionally well.
Buyers are very keen on ‘one-of-a-kind’ properties, and unique homes with plenty of character, such as country mansions, are dominating the market, particularly with new build properties in limited supply due to a slow down in the building industry 18 months ago.
From a regional perspective, breathtaking lake views have helped Cumbria strike a chord with buyers, while Yorkshire and Winchester continue to be exceptionally desirable.
The imposing Cleatham Hall in North Lincolnshire, a Grade II listed Doric style mansion set in six acres, was sold for well over its guide price of £795,000. While in Hampshire, Edwardian property Haydown House charmed buyers and a sale was completed within an impressive two-week time frame.
Looking forward to 2011, it is difficult to predict with any certainty what the top-end of the market will do, but the market overall in 2011, after a cooling off period in the fourth quarter of 2010, will fare much the same as this year, with prices fluctuating but remaining broadly flat.
However, we do expect to see a sharp uplift in activity leading up to 6th April, as buyers try and save at least £10,000 by completing before the new 5% stamp duty threshold levied on £1m plus properties comes into effect. This may well be followed by a brief hiatus, but the long-term impact is likely to be minimal. The truth is that buyers paying £1m or more for a property are unlikely to worry too much about the extra stamp duty charge.