‘Vultures’ at ready as property sales plunge

Oct 6 2008 by David Bartlett, Liverpool Daily Post

Home sales in Merseyside and Cheshire have almost halved. Chief Reporter David Bartlett investigates where the market is heading

DURING the last quarter, two homes worth in excess of £2m were sold by a leading estate agency in one of the most desirable areas of the Wirral.

The buyers were individuals so wealthy they did not need a mortgage. And so it is that Caldy continues to be one of the most sought-after areas in Merseyside, and the most expensive postcode – the average price of a detached house is around £750,000.

But the vast majority of people do need a mortgage to buy a home, which is one of the major factors in the current drop in both sales and prices.

In our most extensive examination of the region’s property market, we have broken down the average price of homes, by category and by postcode.

According to data from the Land Registry sales were down 39% in the L postcode area which includes Liverpool, Knowsley, West Lancashire and most of Sefton for the year to June – the period for which the latest figures are available.

The number of sales in the CH area, which includes Wirral, Chest- er, Ellesmere Port, and Neston was down 45%.

CH43 – Bidston, Oxton, Prenton, and L25 Gateacre, Hunts Cross, and Woolton – were the most popular postcodes by volume of sales, with 130 properties changing hands in each between April and June.

In L18, which covers Allerton and Mossley Hill, there were 47 sales, but the average price was down 11.4% compared to the same period last year.

In Speke, the Land Registry’s figures show only 11 sales, none of which were semi-detached.

However, CH60 which includes Gayton and Heswall on the Wirral, recorded the lowest number of sales with just nine.

But in some areas, sales of particular types of homes have slowed to almost nothing. The Land Registry does not provide data where fewer than three sales have been recorded, in a postcode sector.

The data shows there were no sales of flats in Waterloo or Aintree.

While in L17, which covers Aigburth and Sefton Park, only three detached homes were sold, the same applies to Childwall and Wavertree, in L16 and L15 respectively.

Last week, the Nationwide said Liverpool’s housing market had seen one of the five steepest declines in the UK with a 13% fall in prices in the year to September.

Homes in the North West were worth around 9% less, and nationally prices fell by around 12%.

Belfast experienced the largest fall of 26%, but Durham saw a 2% growth in prices.

According to the Land Registry’s figures which run to June, but are the latest available, the L postcode area saw a fall of just 3.8%.

This would tend to indicate that the slowdown in the market had become more pronounced between June and September.

One of the first impacts of the slowdown in housing sales has been the loss of estate agency jobs, and the closure of offices.

In June, Beresford Adams announced the closure of two offices on the Wirral with four being taken over by Bradshaw, Farnham and Lea.

Paul Lea, of Bradshaw, Farnham and Lea, admitted that the trading conditions were tough, but said in many ways it was a return to the good old days.

“About three weeks ago, we thought we were probably at the bottom of the cycle, with mortgage rates beginning to come down,” he said.

“People were starting to come back. In Hoylake last month we sold 15 houses, which was the best month we’ve had in Hoylake in two years.

“But then, all of a sudden, it’s dead again. We know from our database that people living in rented accommodation want to get on to the property ladder, they are just waiting for the signal.”

He said he hoped now that the USA had passed its £397bn banking rescue package that mortgage rates might start to fall and the market would pick up.

“If you have got a deposit and a good credit history, you will get a mortgage. But, if you don’t have a good credit history, you may not.

“It is just going back to the good old days – if you don’t pay your bills, you don’t get a mortgage.”

POPULAR areas like Caldy, where a detached home averages £750,944, have not diminished in popularity with the rich.

“We sold two houses in Caldy in the last quarter worth over £2m. Both properties were bought by people who do not need mortgages.

“But, even for those that do need a mortgage, there are some absolute bargains to be had.”

He said new-build flats could be bought with a 30% discount com- pared to the high points of last year. Last week, Knight Frank started marketing an apartment development at Liverpool’s Princes Half Tide Dock.

The agency said prices had dropped by 25% from what they were originally intended to be sold for, with one-bedroom flats at £127,500.

Agents agree that falling prices are good news for those looking to upgrade to a more expensive property, or first-time buyers.

As prices fall, properties will become more affordable, and more first-time buyers will venture into the market, and sales should start to pick up.

Reuben Vose, partner at Knight Frank’s Liverpool office, believes it will be well into next year before prices bottom out. He said the so-called “vulture funds”, who take advantage when the market hits rock bottom, had not yet swooped.

“We are hearing that the vulture funds are ready to come in to the market, they will step in when we hit bottom.”

OPINION: PAGE 10;

RATE CUT PREDICTED – LDP BUSINESS: PAGE 19

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