Richmond Borough: October '24 Market Update

The Autumn Property Market has a very definite spring in its step. That much is true – we can feel it, buyers and sellers we are talking to can feel it, and other agents that we speak to are feeling it. This, as we come out of the post-election period and enter the Autumn selling season, following a pretty flat first half of 2024.

‍

Despite consternation in certain quarters about the Renters Rights Bill, trepidation about what might come from this month’s Budget announcement, and disappointment that the Bank of England base rate did not fall again at the last meeting, the Royal Institute of Chartered Surveyors (RICS) has revealed that market activity has enjoyed a significant uptick this past month, with the best listings levels seen since 2022. 

‍

Whilst that has partly been fuelled by buy-to-let landlords and second-home owners attempting to sell ahead of the budget announcement, there nevertheless has been a jump in agreed-sales numbers at the same time, proving that demand remains high, as more first time buyers and second steppers (those two groups of buyers more likely to need a significant mortgage in order to purchase) take advantage of falling rates as banks compete for business, in anticipation that the base rate is likely to drop to 4.75% on November 7th.

‍

The Nationwide and The Halifax have both indicated an annual property price increase of around 3% over the past 12 months based on the mortgage offers they are writing, which forms the basis of their indexes. Now, to some people that might sound modest, but in fact that has been the best annual price growth we have seen nationally since December 2021.

‍

This is all well and good to know, because although it describes a national picture, the mood painted by the national picture is something that feeds into local market psyche - so when the national news is good, it does tend to reflect in local markets. 

‍

Hopefully good news, then, for homeowners in Richmond, Twickenham and Teddington, as the most recent ONS data – based on true sales completing and the prices that have hit Land Registry – shows that property prices in Richmond Borough have actually fallen behind the national curve, by contrast decreasing 2.1% over the 12 months to July 2024 (there is always a slight lag when it comes to sold prices reaching land registry, hence discussing July data). 

‍

3% growth nationally (according to mortgage indexes) but -2.1% locally. It is a significant enough difference over a twelve-month period. 

‍

What we have to remember however is the stark difference between the national average property price and the average property value in Richmond upon Thames. Nationally (as of July 2024), the average property price stands at £296,000, up from £286,000 a year previously (just £6,000 but a roughly 2% rise, according to the Office for National Statistics - somewhat behind what mortgage indexes are showing). In Richmond Borough by comparison, the average property value was £744,000 in July; down from £760,000 a year prior, but still more than two-and-a-half times that of the national average. 

‍

Despite any recorded drop in property values here over the past year, our average house price still holds up as being the fifth highest in the country. We have every reason to feel very confident about the strength of our local marketplace – not least, as you will see below, due to history being on our side:

‍

‍

‍

As you can see from this 20 year graph, according to ONS figures, the pattern for Richmond house price growth (or indeed decrease) tends to generally follow the national trend over time, and it similarly follows the trend in London – albeit with slightly more frequent spikes when prices rise or fall. There is no reason to imagine the current trend marks anything long term, and the current lag behind the national numbers probably represents one of those sharper but nevertheless temporary negative spikes we can see in this pattern repeated over the past two decades. 

‍

In fact, this particular swing over the past year is more likely to reflect the reality, that property values here in Richmond had outperformed the rest of London over the couple of years prior to the period we are looking at, and at times outperformed national price trends also. If you take another look at the graph above, you will see that our growth trends (which also means negative-growth trends) since 2020 have, until last year, tended to run behind the curve when markets have fallen and, indeed, ran against the grain for periods as prices even grew a little in Richmond whilst falling elsewhere, and when the market in general has been a bit more positive, property price growth in Richmond has often been more positive still. This 2.1% annual drop therefore looks every inch a market correction rather than anything out of kilter in the longer term, which is something we do expect to see in these sorts of scenarios. In other words, we have had a bit of extra ballast built into our property values, gained when our property prices have grown more or shed less than in other parts over the past fours years, and the 2.1% number we are seeing is a sign that homeowners here have felt they have a little bit of cushion they could fall back on and now let out, to help our market along. A correction, nothing more. 

‍

For a more in-depth chat about the property n market in Richmond, please do give us a call - we would love to share our expertise and can certainly give you advice on where your own property value sits today.

‍