The Daily Telegraph - Saturday - Money
Where the property boom is fizzling out
Record house price growth has dominated property headlines in the past year, but in a smattering of neighbourhoods the first cracks have started to show.
The stamp duty holiday savings, that artificially inflated house prices, disappeared for good just as the furlough scheme ended, and rising inflation put a strain on families’ finances. Now markets in several areas of the north of England and Midlands have become strained, with supply rising just as demand has fallen. There are fears this could spread across the country.
In August, new listings of properties in the Toxteth area of Liverpool were up 113pc on the same period last year, according to property website Rightmove. At the same time, agreed sales fell 33pc year- on-year. Elsewhere in Merseyside, new listings in Prescot jumped 20pc while demand fell 41pc.
Kirsty Roberts of Entwistle Green estate agents in Allerton, which covers Toxteth, recently listed two houses above the £500,000 mark that attracted far less interest than they would have previously. “One of them has four viewings booked,” she said. “A few months ago it would have been 20.”
Just as demand has calmed down, supply has started to rise. “Valuations have probably doubled compared with most months this year: normally I would do two or three a day; now I am doing five or six,” said Ms Roberts.
“A lot of people are worried about their jobs and finances, or they are separating from their partners. For most, it’s not a move by choice. By the end of this week I will have listed 11 homes, normally it would be six.
“I have a couple of sellers who are moving because they have seen they can get a good price. But I have another who can’t afford their mortgage and is going to move back in with their mum.”
The end of the stamp duty holiday has been key for buyers. The tax break particularly fired up the top end of the market. “Before Christmas last year it was crazy for everything worth £500,000 upwards,” said Ms Roberts.
But what the Chancellor gave, he had to take away. The tax holiday ended on Sept 30. In the lower and mid-level parts of the market – below £250,000, where homes were unaffected by the tax break – competition is still fierce. “But anything above £ 250,000 has slowed down,” she added.
In the wake of the first lockdown, Toxteth’s popularity boomed, with buyers moving from more expensive locations such as Manchester accounting for 40pc of residential movers, said
Sales in the port town of Caernarfon jumped by 38pc but supply has doubled
Ms Roberts. Demand from this group cooled as the tax break was withdrawn and workers have started to return to their offices.
Four of the other pockets that have seen the biggest shifts in supply and demand are in the Midlands. In the market town of Holbeach near Spalding in Lincolnshire, new listings jumped 32pc year- on- year in August while demand fell by 54pc. In the Stechford area of Birmingham, listings rose by 54pc while demand fell by 29pc.
Amee Chadwick, branch manager of Burchell Edwards estate agents’ in Solihull, West Midlands, said: “Now the stamp duty holiday has ended the market has quietened down.”
Inquiries have dropped 50pc, she said, in part because the market has been a victim of its own success: firsttime buyers have been bidding competitively and paying asking prices in full. Values have jumped by 7-12pc. In turn, this has priced out investors, who can no longer achieve the yields they want. Their local market share has halved from 40pc to 20pc.
In Toxteth, landlords have similarly been spooked. Ms Roberts noted a two-bedroom house in Dingle, which shares Toxteth’s L8 postcode. “The most those properties have ever gone for is £110,000. The owner listed at £125,000. He has two offers at £160,000. It’s unheard of,” she said.
Wales accounted for another two supply and demand shifts. In Ferndale, in Rhondda Cynon Taff, listings jumped 58pc while demand fell 8pc. In the port town of Caernarfon in Gwynedd, agreed sales were up 38pc – far outpaced by a doubling of supply.