25% DROP IN ROMFORD HOMES FOR SALE IN THE LAST 4 MONTHS

What does this mean for Romford property owners?

With most Romford families home schooling their children in lockdown and the forthcoming Stamp Duty Holiday deadline on the 31st March 2021, less Romford properties have been coming onto the Romford property market since the new year. This has prompted a 25% drop in the supply of Romford homes for sale compared to October 2020.

For the past couple of decades, like clockwork, Romford estate agents’ busiest times for putting property onto the market is the new year to Easter rush, with a smaller flurry of new properties coming onto the market in the mid/late summer. Yet, since the ending of lockdown 1.0 in the late spring 2020, nothing has been normal about the Romford property market.

Throughout the summer, the number of properties coming onto the market in Romford steadily rose to its peak in October and the number of properties then becoming sold subject to contract (stc) rose even higher (and whilst statistics don’t exist for the properties sold stc, anecdotal evidence suggests there were just under 50% more Romford properties sold stc in the last six months of 2020, compared to the same 6 months in 2019).

However, back to the number of properties for sale…

The peak of the number of Romford properties on the market in autumn was 1,897 – that now stands at 1,414

The first lockdown caused many Romford homeowners to want to move with the need for extra space to work from home and in some cases larger gardens. This was further exacerbated by Romford home movers also trying to take advantage of the Stamp Duty holiday to save themselves money on this tax on moving home.

This meant many more Romford properties came onto the market (more than a “normal” year) in the last 6 months of 2020. However, those Romford home movers motivated to move for the extra space/save money on the tax, did so in the summer/autumn and have already placed their Romford home on the market (and are probably by now sold stc rushing to get their house purchases through before the deadline on the tax savings).

So, how does Romford compare to other property markets, and what does this recent reduction in Romford properties on the market mean to Romford homeowners and landlords?

There are 7% more properties on the market today in Romford, compared to 12 months ago

Interesting when compared that to the London and national picture. There are 39.5% more properties for sale than a year ago in London, whilst nationally, according to Zoopla, there are 12% less properties on the market today (compared to a year ago). Yet it gets a lot more interesting when you look at what type of property is on the market in London.

There are currently 47,900 apartments for sale in London compared to January 2020, when there were only 32,600 – a rise of 46.9% … all the more interesting when there are only 15.1% more London semi-detached houses for sale and 1.8% more London detached homes over the same 12-month period.

The jump in London apartments for sale is being pushed by an upsurge of London up-sizers eager to trade their city living apartment up to suburban houses, and a small handful of panicky London buy to let investors who are wanting to exit the London property market following falling rents for apartments. Looking closer to home in Romford, there are…

42% more apartments for sale in Romford than a year ago, whilst there are 20% less detached homes

So, whilst there are some differences between the supply of individual types of property in Romford (e.g. apartments vs detached houses), the overall reduction in the number (i.e. supply) of properties for sale can only mean one thing, when there is a reduction in the supply of anything and demand remains stable, this will mean a decent level of upward pressure on Romford house prices in the short term (although I suspect there will be some downward pressure on Romford apartments with that level of increase in supply – maybe some interesting ‘opportunities’ for all you Romford landlords?).

Will overall demand for Romford property continue to be stable?

Lockdown 3.0 will probably cause another wave of Romford people who want to move home (thus increasing demand). The last property crash (the Credit Crunch in 2008/9) was caused by a huge increase in the supply of properties for sale in London when people lost their jobs and interest rates were much higher. People couldn’t afford their mortgages and so dumped their homes onto the market all at the same time – causing an oversupply of property for sale and hence house prices dropped.

The number of London properties for sale increased from 66,250 in early 2007 to 100,200 in May 2008, a rise of 51%

It was this increase in the level of property for sale in London that caused Romford property prices to drop between 16% and 19% (depending on the type of property) in Romford over the 12 to 14 months of the Credit Crunch. So, whilst the Romford property market is slightly top heavy with apartments, as long there is no sudden change in the demand or supply of properties and interest rates remain at their current ultra-low level – the medium-term prospects for the Romford property market look reasonably good (especially detached homes).

If you are a Romford homeowner or a Romford buy-to-let landlord and want to chat about the future of the Romford property market – do drop me a line.

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