The property market and other paradoxes…

September was a record month, both for temperatures and our Winchester business. Hampshire harvests were safely gathered in and although rivers were low, there were some lovely days sport to be had with good grilse runs and some large late season brownies.

October has been marked by England’s departure from the Rugby World Cup and some choice phrases from the Governor of the Bank of England; “It is unfamiliar – that’s because this is the most serious financial crisis we’ve seen, at least since the 1930s, if not ever. And we’re having to deal with very unusual circumstances but react calmly to this and to do the right thing.” Mervyn King’s words, whilst chilling are also apt for the Hampshire property market, where we are contending with very unusual circumstances indeed. The dearth of prime properties for sale is more extreme than usual, yet buyers are less willing to compromise. Whilst there are plenty of buyers looking for good country houses, there is currently less urgency to purchase and the negotiations are more complex than usual. When markets are faring well, buyers are more prepared to compromise, so if 7/10 of their boxes are ticked, they are more than likely to proceed. Currently, however, buyers do not want to consider any risk whilst the markets are uncertain and would much prefer for all ten boxes to be ticked, which can sometimes prove to be an unachievable aspiration. Buyers are reluctant to bid, in effect, against themselves and in many cases, would prefer to wait until there is competition to confirm the level of market value. All of this slows the process whilst the battle of wills is played out.

The oxymoron of a shortage of properties and buyers unwilling to compromise is alien to Hampshire and in stark contrast to conditions in London. The prime London market, which is dominated by international buyers, is moving much more quickly; there is a shortage of property coming onto the market so buyers know that they have to act quickly in order to compete. A mild autumn and a lively London market are the usual indicators of a busy October in Hampshire but sellers of prime property are in short supply. Negative market comment in the media appears to have become a self fulfilling prophesy; clients, like early season partridge are, it seems, understandably easily spooked. Perhaps the most frustrating paradox is the lack of property creates a lack of property; potential vendors are unwilling to enter the upheaval of a sale without a reasonable chance of a suitable alternative home to trade up or down to, thus there is a logjam.

I have just returned from my yearly pilgrimage to Scotland, in pursuit of the silver tourist; Salmo salar and whilst a wonderful week was had, as always, we were plagued by river water levels. Salmon get trapped in pools, waiting for a spate large enough to return upstream to their redds; the Hampshire market has similarities with buyers and sellers in a holding pattern, waiting for the flow of activity to return.

I am regularly updating buyers and their agents and hope that the current impasse in the country market can be resolved before the city Christmas bonuses are announced.

Matthew Hallett
Partner
Head of Residential Sales, Winchester