FAM­I­LIES FEEL THE SQUEEZE Up­grad­ing to a big­ger FOR SALE home is get­ting harder, says

The Sunday Telegraph - Sunday - - Property -

Where, oh where, has the fam­ily house gone? In the stagnant wa­ters of to­day’s prop­erty mar­ket, fam­i­lies are hurt­ing, par­ents are back­track­ing on de­ci­sions made about schools, sib­lings are shar­ing bed­rooms. Con­sider the dilemma of Alan and Sarah White­field, who put their three-bed­room house on the mar­ket 18 months ago and are yet to sell. They had their fourth child, Theo, 10 months ago; space is tight.

That said, their home, Lock­ner Cot­tage, is an idyl­lic, brick, semide­tached tile-hung cot­tage with a pretty gar­den and views over the fields to St Martha’s Church; it is close to the much sought-af­ter vil­lage of Chilworth in the Sur­rey Hills. They know they are lucky to have it, and the chil­dren Jasper, eight, Felix, six, and Am­ber, four, have been happy there.

“The baby is still sleep­ing in with us, which is fine, but it won’t be ideal in the fu­ture,” says Sarah. “We are up to our eye­balls in it all, and we just don’t know whether it will ever end. We had an of­fer early on and couldn’t find any­thing to buy, but just as we found a house we lost the buyer and had the baby.”

Sell­ing through Hill Cle­ments (01483 300300), they dropped the price three times, from £600,000 to £500,000. A fur­ther of­fer came in Au­gust but they be­came trapped in a chain which col­lapsed two days from com­ple­tion. “It is very frus­trat­ing and up­set­ting,” Sarah says, “es­pe­cially for the chil­dren, be­cause they had cho­sen their bed­rooms. We had also paid so­lic­i­tor’s and sur­vey fees.”

Some fam­i­lies have opted for let­ting and rent­ing in or­der to re­alise their dreams. “We had two buy­ers with chil­dren liv­ing in south Lon­don hop­ing to sell and buy in the coun­try in time to start school this term,” says Ge­orge Wade, di­rec­tor of the buy­ers’ agent Prop­erty Vi­sion. “Both were un­able to sell, and there­fore de­cided to let their houses in Lon­don and rent in the coun­try.”

Re­search con­ducted by Sav­ills for The Sun­day Tele­graph shows that an av­er­age prime four-bed­room fam­ily house val­ued at £808,000 a year ago has dropped by 12.8 per cent to £705,000 this au­tumn. It also found that the re­ces­sion has re­drawn the game of snakes and lad­ders; some lo­ca­tions have fallen harder than oth­ers. Cam­bridge, for in­stance, which has a ro­bust mix of high-tech, sci­ence and com­muter buy­ers, and which has good schools, has dropped by only 8.5 per cent. Esher has fallen 22 per cent, due to its heavy de­pen­dence on buy­ers con­nected with the City. “They ac­counted for half of all buy­ers in the prime sub­urbs dur­ing 2007 and 2008,” says Sav­ills’ re­search di­rec­tor Lu­cian Cook, “so they have been af­fected by the tur­moil in the bank­ing in­dus­try. And the knock-down and re­build de­vel­op­ers and buy­ers have van­ished.”

But why has the fam­ily home been so badly af­fected? Ex­pand­ing fam­i­lies have to fork out as much as £225,000 for each ex­tra bed­room. To do this, they need to in­crease their bor­row­ing, and the credit crunch has put an end to that. “Up-siz­ers ac­count for roughly two-thirds of de­mand for four-bed­room fam­ily houses,” says Cook.

As the White­fields have found, chains are gum­ming up the tran­si­tion be­tween fam­ily houses. “Most sales in the £600,000 to £800,000 range are heav­ily re­liant on chains,” says James Grillo of Strutt & Parker.

This is a mi­cro­cli­mate where cash buy­ers aren’t seen, and where buy­ers need to sell their own houses. Grillo says: “I pre­dict that we will see many more sales fall through at this level due to chains.” De­vel­op­ers say there is a 40 per cent fall-through rate, while agents put it at around 30 per cent.

But could fam­i­lies now ease them­selves back into the mar­ket as prices drop? Ab­so­lutely, says Ed Mead, di­rec­tor of Dou­glas and Gor­don. “The fam­ily house over the next few months is prob­a­bly go­ing to be the most dy­namic prop­erty in the mar­ket.”

Plenty of sell­ers who paid top prices for houses in Chelsea and Ful­ham – many are City work­ers – are hurt­ing and want to sell. Ful­ham in par­tic­u­lar is a “nappy val­ley”, a ver­i­ta­ble cra­dle of fam­ily houses, where 50 per cent to 60 per cent of the mar­ket is de­pen­dent on them, says Alex Booth of Strutt & Parker. He adds: “All the ven­dors will buy some­thing else once they have sold.”

In Ex­eter fam­i­lies are tak­ing ad­van­tage of the change. “In the past three months we have sold seven fam­ily homes in the £515,000 to £850,000 range, two of them at nine per cent be­low the guide price,” says Robin Thomas of Strutt & Parker.

Prop­erty web­site Move­withus.co.uk, how­ever, says prices need to drop a fur­ther 7.5 per cent to en­cour­age trans­ac­tions to take off. Even the lat­est in­ter­est rate cuts won’t de­liver this un­less lenders start fund­ing buy­ers again.

Full house: Alan and Sarah White­field and their chil­dren, from the left, Felix, Am­ber, Theo and Jasper. They are strug­gling to sell their cot­tage, right

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