For our first issue of the New Year we thought we'd turn the Comment slot over to some of the closest observers of the local property scene – Herefordshire's estate agents.

The views of four top agents appear below. Perhaps it isn't too surprising that all have an upbeat assessment to offer; a housing recession wouldn't exactly be in any estate agent's interests, and temperamentally they tend to be optimists.

We have to agree with their general conclusion, though. It's clear that the country's housing stock is overpriced, and a correction is long overdue – if only to wait for average incomes to catch up a bit and so improve affordability. It's also becoming apparent that some buyers at least are getting cold feet, being either unwilling or unable to commit to a mortgage (especially when rates aren't at their best, and look as if they won't be becoming any more attractive in the short term). So the conclusion is inescapable: there will be a slowdown of some kind in the market.

Just how much of a slowdown, and just how it will affect the local market, are more debatable matters. The agents all think that (a) everyone needs somewhere to live and (b) Herefordshire is inherently a nicer place to live than most. And no-one could disagree with that. There is an issue over the shortage of supply; we aren't building many new houses locally, and certainly none of those creeper-covered half-timbered country houses that seem so popular.

Here at Mundy's we've not seen any significant fall-off in business. Maybe that's because we spread our net wide – while we do focus on Herefordshire, much of our business now comes from all over the country – and of course there's the excellence of our service, our fees, and our conveyancing team, all of which help to maintain a good flow of repeat business.

The consensus is that 2008 will be an interesting year for anyone involved in the property business – buyers, sellers, agents, financial intermediaries, and yes even the conveyancers. Our judgment? Yes, the market will slow down; but it won't affect all types of property equally, and it won't affect all areas to the same extent. And the fundamentals of the economy (high employment, growth at 2% pa and more) currently seem strong enough to see us through the current financial turbulence caused by ill-advised international commitments on the part of the world's banks. By the end of this year we think things will seem a lot rosier.

Nick Mundy

PS As a postscript, I have just been speaking to a client, a commercial surveyor in Bristol, who reports that they are very busy at the moment and have picked up a lot of new business in January. In particular, bidding for development sites for housing is very strong – not much sign of a weak market there.

Happy to be here

Following an unlucky and badly timed fall (second day) whilst recently skiing in Switzerland, my enforced rest on the sofa of my chalet allowed me ample time to watch endless hours of BBC and Sky news – and oh dear, our green and pleasant land is apparently in a mess!

Rain, gales, floods … and this was the good news. The global collapse of the financial market, the impending recession, the over borrowing and the expected crash in our housing market should make me want to give up my 25 year career as an estate agent and remain in Switzerland to become a ski instructor. Now although the latter might seem a wonderful escape, I am still much more likely to have a crash skiing than I am selling houses.

From an agent’s perspective we had another record year in 2007 despite all the gloom and doom. Why? Well some might complain about traffic and the lack of a new bypass; others demand a better infrastructure and greater opportunity for growth. But if you want to live in one of the country’s best-kept secrets, enjoy outstanding countryside where individual rural gems can still be found, benefit from a low crime rate and a safe place to bring up children, it really is no contest.

Now, we would admit things are slower and the pendulum has swung slightly more towards buyers than sellers; but this is mainly a national view. Buyers are rightly questioning prices more as borrowing becomes more conservative – but the market did overheat and a more balanced market will benefit everyone.

2008 has already started well in Herefordshire, with a strong influx of new buyers from London and the south-east; and believe me, they still think property here is affordable compared to other areas. They are taking more time, and it is essential that what we offer for sale is not only competitively priced but also well presented.

Interest rates on the whole are still pretty good – and those of you old enough to remember paying 16% in 1988/89 will recognize that they are comparatively very good and likely to reduce again before too long.

The national prediction is still to see a 3-5% growth in property prices this year across the board. Although some mass-market homes may struggle at times, particularly if the buyer has the choice of several similar houses, the demand for individual country houses, cottages and land will remain strong.

So I’m happy to be back. I may still be limping a bit but unless the property market and I trip ourselves up again we will be back to normal in no time.

I have always worked in Herefordshire, primarily in Leominster, and I believe that I have a very good local knowledge of the area, its economy and, most importantly, the residential property market.

During the 1980s house prices were rising quickly, but no-one expected the almost weekly price rises we were seeing during 1988/1989. Properties were being sold to buyers who didn’t see the property until completion (yes, that’s true!) because they were making offers over the telephone instantly in fear of not getting an offer accepted on a suitable property.

Although property prices in Herefordshire have doubled since 2000, the panic buying of the late 1980s has not been seen, and most purchasers and sellers have a much more professional approach to their transactions.

There is no doubt that the market place has slowed down since the problems of the national and local flooding in 2007, the introduction of Home Information Packs, and, of course, the interest rate rises during the year.

There are now encouraging signs that things are improving. HIPs have settled in and are being produced relatively quickly, and there are even options to defer payment until later if that helps.

Interest rates have already dropped a quarter of a percent, with predictions by the financial institutions of more reductions during 2008. The banks and building societies are still offering lower fixed rates and tracker mortgages to give buyers a year or two to financially adjust to their mortgage payments, and the general feeling in Herefordshire is that the price of property during 2008 will remain generally stable and will still provide opportunities for good financial investments in the property market.

Property is still selling if priced correctly, and there are many potential purchasers, who have sold their own properties, renting in the area, hopeful that the right property will come along for them this year.

2008 will be a better year than many forecast (my opinion), but please consider your sale and purchase carefully, be positive and committed, and take advice from your solicitor, estate agent and surveyor over any concerns that you may have during the transaction.

Lifestyle choices

There is a lot of speculation in the press about the effects on the property market of the crash of the sub-prime market in America and the credit squeeze that we are now seeing as a result.

I have been in practice in Herefordshire for over 40 years, gone through three adjustments in the property cycles – namely 1973 and the oil crisis, 1982 and of the course the early 1990s. There is no doubt in the last quarter of 2007 the market slowed down. This property market is in need of some adjustment, but in my opinion country houses with land in the £1,000,000 bracket will still be in demand. Agricultural land will continue to increase in value.
The problem may lie with the buy-to-let market. Those that have purchased them in the last two years have seen very little return and in some cases are subsidising their tenants.

In fact, we have seen a levelling off of prices in the city close to 2007 but there is a demand for anything that is realistically priced and does not have any major problems such as the structure, rights of way, or proposed redevelopment plans within close proximity.

It is interesting to see that quite a few people are coming in from the South and the Midlands who are looking for lifestyle, checking websites now to see where the best education could be for their children, and there is no doubt that Herefordshire primary education is some of the best in the country – and our Sixth Form College is in the top six for A level results over the last few years. Herefordshire is also going to expand because of the 100-acre Edgar Street Grid, the Rotherwas connection off the A49, Leominster with its new 26-acre industrial estate and 500 houses being constructed at Barons Cross.

As a firm we have just negotiated one of our biggest commercial deals in Leominster; we are opening a new office in Chester under the name of Jackson Equestrian.com. We are cautious but quietly optimistic of the future. 2008 will be an interesting year in my opinion, with some readjustments but great opportunities to move up the housing ladder, perhaps move into the countryside which has been unaffordable for some people over recent years.

Remember, property is a long term investment. Sometimes people just think of the financial return and not that it is a home. You cannot put a price on quality of lifestyle. Be realistic in your asking figure, negotiate hard when you purchase, and choose an experienced estate agent!

People do need somewhere to live

2008 promises to be a very interesting year for the property market and one that agents are approaching with great optimism but also a degree of realism.

Overall, 2007 was a buoyant year for property sales and lettings, but the year ended badly with the market significantly slowing down earlier than usual. The introduction of Home Information Packs certainly contributed to the stagnation and delayed the number of properties coming on to the market – and the ‘spontaneity’ of selling a home has now been eroded.

Prices fell slightly in the latter part of 2007, and thoughts are that there may well be small downwards adjustment in the early part of 2008, by possibly, up to 5%.

On a positive note, it is expected that interest rates will fall during 2008, and this, coupled with a slight reduction in prices, will fuel the market and we are expecting increased activity as the year progresses. Sensibly priced property will sell. Vendors with unrealistically high expectations will be very disappointed and will not attract interest.

The doom-mongers should remember that people always need somewhere to live. We live in an island with a rising population, limited land for development and complex planning laws.
The buy-to-let market stumbled in 2007, but this is also expected to come back to life in 2008. The reduction in interest rates and uncertainty within the banking world makes the prospect of leaving money on deposit at a bank less attractive, and property will be seen as a safe option.

We do not expect price rises in 2008, which will be a year of stabilisation; and with inflation at just over 2%, house prices will become more affordable.