House prices in Reading could fall up to 10 per cent more this year while the lettings market continues to thrive.
Speaking at The Forum round table on February 9, Mike Shearn, chief operating officer for Haslams Estate Agents, told delegates the market is unlike 2008 when activity stopped and developers went bust.
Instead, the sales market is still active, particularly the lower end, but last year’s decline in prices looks set to continue.
He said: “Locally, we saw secondhand prices dip just under five per cent in the last quarter of last year. I think that’s probably carrying on. There may not be a recession but I think they will probably come off another eight per cent, maybe something like eight-10 per cent this year.”
However the lettings market is in a very different place.
Mr Shearn said: “The lettings market is still flying. There’s just not enough stock and that’s where the Government is playing quite a big role in terms of beating up landlords – private landlords are all bad.
“So, after what they’ve done in legislation over the last five or six years, a lot of PRS landlords have just left and I think that will carry on. That’s taken stock out of the market and BTR has come in and that’s been good.
“BTR has been very well-received generally across the country with 20 per cent premiums over the PRS market.”
A highly successful scheme in Reading called Domain employs seven full-time staff to maintain services but Mr Shearn said not all schemes are so well thought out.
One, in Lewisham, failed to take account of the volume of parcel deliveries and now has to employ four staff purely to deal with parcels and mail.
“That’s £120,000 cost they’ve got to get back,” he said.
The new homes market, however, has become very slow. Developers, he said, faced the perfect storm as the downturn followed the end of Help-to-Buy.
“They have had to get off the crack cocaine that was Help-to-Buy. We’ve had lots of schemes where 80 per cent of sales were Help-to-Buy.”
He added: “It was a bit of a nonsense because it was brought in to stimulate supply but all it did was stimulate demand and so prices went up.”
The Reading housing market, he said, could be divided into three geographical areas: town centre, mid town and out of town. A two-bedroom town centre apartment could likely be worth £100,000 more than an out-of-town equivalent.
The problem of tackling affordability for first time buyers was discussed but Karen Jones, partner at Blandy & Blandy, said she has been unimpressed with the Government’s delivery.
She said: “It’s not going to happen through the delivery of new houses. Government have really completely messed up.
“It’s all about short term votes and the people that are suffering are the youngsters. It’s so short-sighted.
“I see people objecting to panning applications which would put valuable money into the community and provide homes for young people and yet the people objecting are the people our age who cannot seem to see the future and can’t understand that what they are living in was probably built on a green field in the 1960s, 70s or 80s. We need to educate people better.”
Philip Waddy, managing director of WWA, said Government could assist by putting some regulations into the building regulations process, rather than in the planning process.
Jade Uko, senior account director for DevComms, asked delegates their experiences of Reading’s Article 4 Direction and the general feelings about Permitted Development (PD).
Nigel Horton-Baker from REDA said: “In a sense it’s about taking control of the destiny of the town centre.
“I’ve spent a lot of time with the council doing a town centre strategy, a future strategy a repurposing and regeneration strategy which is yet to see the light of day but it’s about having that control and PD takes a lot of that control away from shaping and making your town centres more liveable and repurposing them for the future.”
Mr Shearn said: “In Reading Cllr Tony Page (lead councillor for transport) has said on numerous occasions these are the ghettos of the future and some of them are poor, to be honest. And the other thing is councils don’t get any s106 contributions so it doesn’t address the housing problem in any way.”
A full list of stories from The Forum round table:
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