City house prices remain flat - but rentals buoyant

Sheffeild Housing Story....Views of Sharrow
Sheffeild Housing Story....Views of Sharrow

SHEFFIELD’S flagging property market has at last bottomed out – and city agents say there is hope of an improvement in 2013 as interest begins to pick up.

Enquiries from would-be buyers rose in December, contrary to expectations.

“It’s a brave person who predicts that the market will be better next year. But there is a glimmer of hope,” said James Mee, head of Saxton Mee.

“Our sales are up by around 20% in terms of transactions and if 2013 is as good then I’ll be happy.”

House prices have remained flat across the city, and are expected to remain so for the forseeable future.

“Viewing levels are quite good, but all the offers are 5% or 10% below asking price,” said Joanne Bloor, or Bloor & Co.

“Our sales numbers are up and I hope that’s a sign of improvement. But prices have been stable for the last six months and I anticipate more of the same.”

Andy Winter, a partner with Blundells, agreed: “It’s pretty stagnant – and there’s still some reduction to come in the top end of the market.”

The problem there is unrealistic vendors, he said.

“We’re selling top end properties at alarmingly low prices. A house in west Sheffield was marketed at £750,000 and has just sold at £550,000; it’s as desperate as that.

“I know of another property that went on the market at £950,000 in 2008 and the owners are now considering accepting £650,000.”

There is a concensus among local agents that borrowing remains difficult, except for those with a substantial deposit, good salary and perfect credit history.

And surveyors are adding to the problem for impecunious buyers by under-valuing properties, creating an insurmountable differential, says Joanne Bloor.

“Society could never have sustained the level we had before, but now we’ve gone the other way and are being over cautious.”

The auction and rental markets both remain buoyant, supported by repossessions, probate sales and vendors forced to move because of work.

But the stagnant market means that up to 25% of those who bought at the height of the market, in 2007, are now in negative equity.

The one thing that might drive up prices – particularly in the south and west of the city – is the current shortage of supply.

A dearth of three and four-bedroom family houses could get things moving again, said Andy Winter.

“There’s a slight ray of sunlight with family houses under £500,000, in good school catchment areas; and there are pockets where there’s been an improved number of transactions. Hopefully it’s bottomed out now.”

The latest RICS regional housing market survey predicts that prices generally will remain flat. But it admits there are “tentative signs of recovery” in the sales market with buyer interest growing across the region over the last month.