PUBLISHED: 13:11 23 June 2008 | UPDATED: 15:17 20 February 2013
Amid the so-called credit crunch, local experts say Hampshire's property market is remarkably resilient, writes Veronica Cowan
Trying to get a handle on the true state of the property market is tricky, because while the media is blamed for whipping up the impact of the credit crunch, its critics have an incentive to talk it down.
It would be folly to pretend Hampshire is immune from the effects, but Graham Evans, managing director of Penyards, prefers to describe the property market as going through a period of 'correction', and there is no doubt that house price inflation needed to slow. He argues that any disparity is largely driven by geography: "Whilst Hampshire is not isolated from the effects of the global market place it is resilient and there is huge regional variance." He also makes a distinction between the mass market and the select market place: "A new flat in Eastleigh may be difficult to sell, but a character house less so." However, those starting the buying process should expect it to take several months. "People are more deliberate, and won't make impulsive purchases, but the upside is that it is more efficient, once people have made their minds."
The facts about repossession
Ministry of Justice figures show mortgage providers started legal action against 1,043 households in Hampshire and the Isle of Wight in the first three months of this year, a nine per cent increase on the same period last year. That's the bad news, but on a positive note, this increase was lower than in most other parts of England and Wales, apart from London, Kent and Gwent. dd to that the statement from the Council of Mortgage Lenders that its members will use repossession only as a last resort, and that out of 11.8 million mortgages nationally, its forecast of 45,000 repossessions this year equates to only around one in 300 mortgages, less than half the rate experienced in the early 1990s, and the picture looks far from bleak.
The real fear is of negative equity, where the value of a house falls below the outstanding mortgage sum, but the risk of this is lower where a home was purchased several years ago, and although Land Registry figures on 6,691 Hampshire homes in the final quarter of 2007 showed prices actually paid for properties had slipped by three-and-a-half per cent, the average price of a house was still higher than for the same quarter the previous year.
So which parts of Hampshire are most resilient? Nick Freeth, managing director of Morris Dibben, says Winchester is seen as a special case, and is still benefiting from commuters moving out of London: "While the market in Winchester is not as buoyant as it was, there is still a market there, and Petersfield and Alton are other towns in the county that are holding their own." In the New Forest, where Murray & Hayward estate agents are located, partner Chris Hayward notes that sales are down on last year. "The New Forest is popular, but people are nervous."
Moving across to Portsmouth, Southampton and Fareham, where solicitors Coffin Mew LLP operate, John Blake, conveyancing manager, reports activity down by 30 per cent, although there was more work in April than in the previous six months, "so there are signs of spring," albeit a little later than usual. He thinks a lot could depend on interest rate reductions being passed on to borrowers, which had not been happening. "There are better fixed rate deals being made available to buyers, so hopefully it will get better."
Mortgages still available
National press headlines paint a sad picture of the mortgage market, but although there are fewer deals, that still leaves about 4,500 to choose from, although it's difficult to obtain one without a deposit of at least five per cent of the property's value.
First time buyers are struggling the most, although Mr Freeth says anyone enquiring for a mortgage can get one "if they meet the basic income multiples and credit rating." He adds that deposits can usually be found, often with the help of parents. This is echoed by Mr Hayward, who says: "The biggest problem for first time buyers is affording the properties themselves, because their incomes are not sufficient."
Matter of confidence
Mr Evans perceives the real weakness as lack of consumer confidence. "It is a question of having confidence and believing in the market.
One couple who have done that are Sam and Amanda Heatorn, who put their neo-Georgian property in Curbridge, near Botley, on the market in mid-May. Mr Heatorn comments: "I believe my property is in a sector that is not affected. It is a unique house, and you only need one deal." You certainly do, and according to Mr Freeth if you are planning to move upmarket this is the best time to do it: "The gap will be smaller, and although you may have to reduce the price of your house, you will be able to buy one at a reduced price, too."