I had an interesting conversation with a local Maidenhead
accountant the other day. He is quite an observant chap (I know this because I
have known him for a few years .. but I suppose you have to be as an
accountant!). Anyway, he mentioned a few things he had noticed recently in Maidenhead,
one that Maidenhead property prices had gone up in the last few years but
nowhere near the growth levels that were being achieved in central London, and
secondly, that he thought the number of for sale boards in Maidenhead (and more
importantly ones with sold slips on them) had increased over the last couple of
years.
The rate of house price inflation in Maidenhead continues to
slow with growth of 10.8% in the 12 months to February compared to 13.3% just under
six months ago, according to the latest Land Registry data. However, there is
considerable local variation with house price growth ranging from 10.5% in Buckinghamshire
to 14.5% in Bracknell over the last 12 months.
Whilst Maidenhead hasn’t seen the 20%+ per year in house
price growth of London over the last couple of years, Maidenhead has seen a sharp uplift in the number of properties
sold throughout 2014 as base line demand
for housing grows, which suggests there is substance to the recent pick-up in
house price growth in the town. Since the Second World War in the UK, when the
number of properties sold has grown, property values grew soon after. The 7.14%
uplift in property transactions in Maidenhead in 2014, compared to 2013,
indicates the most significant recovery in house market activity in Maidenhead
(outside London) since 2007.
When you compare Maidenhead with London, you could be
looking at two different countries. In London, its mid/late teens house price
to earnings ratios are impacting demand (i.e. the average property value is
often 15 or 17 times the average wage in London.…..in fact in Knightsbridge the
ratio can be 30 to 1). However, the
number of people wanting to sell has dropped considerably, meaning that falling
sales volumes combined with a general slowdown in activity in the run up to the
General Election are resulting in lower mortgage approvals for home purchase.
Transactions are a great indicator for house prices. The
acceleration in house price growth in London in the last two years was preceded
by three years of rising transactions. A similar pattern is being registered in
the Maidenhead area, as pent up demand returns to the market supported by low
mortgage rates and an improving economic outlook.
But before you get the Champagne out, while the uplift in
activity is welcome news, the numbers of Maidenhead property sales in 2014 are
still 20.38% lower than the level seen in 2007 and property values are 15.05%
above the 2007 levels. The ongoing housing recovery is far from broad based and
remains focused on middle to higher value areas within Maidenhead where
households have equity and find it easier to access mortgage finance.
