Brentwood: House prices still booming...

Average house prices across Essex have, according to one of Brentwood's leading estate agents, broken through the £100,000 barrier for the first time ever.

The prices of Brentwood properties have gone into orbit with the average house sale in March through Bairstow Eves spiralling to £150,000. And even though the Halifax House Price Index shows that UK house prices actually fell by 0.4 per cent in March, house price inflation is still 13.5 per cent.

Rocketing house prices are creating a property boom which, despite the Chancellor's Budget attempts at cooling the market down by withdrawing mortgage income tax relief, looks set to go on rising to at least well into the summer months.

Recent rises in interest rates haven't been able to put the brake on either, with Brentwood prices rising faster than at any time since the last property boom in the late 1980s. Some are soaring by as much as an amazing £75 a day.

According to the Nationwide Building Society house prices generally rose by 2.3 per cent in March, with the average price rise across the country climbing from £77,072 in February to £79,797 last month. Over the past year prices have risen by, on average, 16.2 per cent which is the fastest rate since 1989.

Bairstow Eves managing director Dai Jones said: "Across Essex we are selling 1,200 houses a month with our average sale price breaking through the £100,000 barrier for the first time in March, which is £3,000 up on our February figure. Our average Brentwood house sale in March was £150,000.

"Prices were very steady over the winter period. The average countywide November sale, which went through our offices stood at £88,000, rising to £89,000 in December and returning to the November figure in January, which is usually a poor month. By February the average house sale countywide was £97,000 which was a terrific jump and now we have another jump to £100,000."

He predicts that on average prices will continue to rise by 10 per cent with some even rising by as much as 12 per cent. But he warns that the general consensus among estate agents is that the market is peaking.

He said: "At the moment, it doesn't matter at what you look at, prices of all properties are rising. Easter is traditionally our best sales period, but there is a feeling prices are about to peak."

He said that Gordon Brown's withdrawal of mortgage tax relief from April 6 is likely to be the principal price brake. "But the property market is like a big ship, when brakes are applied it is not possible to see it slow down immediately. I think that during the first half of this year there will be little evidence that the market is doing so."

A spokesman for family run Gardner Property Services said that too many buyers were chasing too few properties. "We have, over the last few months, experienced increasing demand for most types of property covering a broad range of prices which is not being satisfied by the number of properties coming on to the market. However vendors who have taken advantage of this high demand have in most cases achieved their asking price and have gone on to achieve a rapid and fuss free sale.

"Although the volume of sales in the first few months of this year is actually below that achieved last year, selling prices have increased dramatically and look likely to continue to do so."

David Wiffen, sales manager at Walker's St Thomas Road office said that although he did not think that interest rate rises will make any difference, the Chancellor's jacking up of stamp duty could have a slowing down effect.

"There have been a couple of interest rate rises over the last few years and they haven't brought about even a slight down-turn.

"I don't think the withdrawing of mortgage tax relief will make any difference either, but I do think the stamp duty changes, especially at the top end of the market, could do so."

In his Budget last month Gordon Brown, to the relief of first-time buyers, took stamp duty off properties up to £60,000. But for those in the market for properties costing from £60,000 up to £250,000, stamp duty whacked on another one per cent. The duty rises to three per cent between £250,000 and £500,000 and after that stamp duty goes up to four per cent.

"Four per cent on £500,000 and above is a lot of money and could make a difference. But it's early days, we will just have to wait and see," said Mr Wiffen.

He said that he did not have any properties under £60,000 on his books and that the average three bedroom semi detached house is selling at £180,000.

He said: "The cheapest two bedroomed detached bungalow on our books is up for £152,000. Any property of character fetches a tremendous price, box-type properties are not doing so well, though their prices are rising too."

Owners of properties with a granny annex could, he said, almost name their price. "It's a case of having that sort of property on the market at the time when there's a buyer looking for an annex. At the moment I don't have any such property of my books although some new houses are being built which incorporate bed-sitter suites which could be used for a teenager or elderly relative, but that isn't exactly the same thing."

Ashton estate agent partner Nigel Coyne confirmed that his company had seen huge growth over the past year and that property is becoming in short supply.

"Increased interest rates and stamp duty have made people think more carefully before committing themselves," he said. "They are starting to be wise. If they didn't get their fingers burned in the 1980s they knew someone who did. That has made people very sensible and will prevent the market from becoming overheated and won't, in my view, get out of control.

"We are getting a fair number of properties coming on and they are selling quickly but then we expect that at this time of year which is our peak period."

Converted for the new archive on 19 November 2001. Some images and formatting may have been lost in the conversion.