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