A KEY ELEMENT of the recently published RICS February 2011 UK Housing Market Survey emphasizes the widening regional variation in the UK’s residential property market. The performance of prices in London shows that it is the only region in the UK to record a positive reading. 14% more chartered surveyors reported prices rose rather than fell, in contrast to the national picture where 26% more saw prices fall rather than rise. Newly agreed sales, a good indicator of market activity, were most positive in London, and the number of properties valued at between £1.5 million and £2 million – the great majority of which were sold in London – jumped by 19 per cent.

Whilst prime London is traditionally a high-performing market, this status is currently underlined by the presence of a lot of wealthy foreign buyers in the capital and the return of banker bonuses; all this underpinned by the continuing historically low interest rate which, even if subject to an increase, would incrementally remain low.

TOM GLADWIN, Managing Director PARKHEATH

Parkheath Sales Manager James Clark grew up in NW6, attending Emmanuel School in Mill Lane, whilst Lettings Manager Kate O’Neill has lived in Broadhurst Gardens since October 2008. Between them they have worked at Parkheath’s two linked NW6 offices for nearly 20 years.

Parkheath’s first office was in South Hampstead. What do you like about working in the area?
JC: Parkheath are very established here, and because it’s a tightly defined area you get to see properties coming back to market again and again.
KO: I’m working in the West Hampstead office at present. There are lots of agents in this part of NW6 but I chose Parkheath because it reflects my belief that the property business is a people business.

What are the benefits of living in a Conservation Area?
JC: The character and aesthetics of the area are preserved. Residents can be assured that there are not going to be any hideous extensions suddenly appearing, or PVC windows scarring a building’s fascia. I’m certain residents would also say that not having estate agent boards in the area is another bonus!
KO: Before I joined Parkheath I read that the company campaigned against boards in Belsize Park, where the NW3 office is based. I remember thinking that it showed a certain kind of allegiance and respect for the area it worked in, and I liked that about it.

What’s special about the South Hampstead Conservation Area in particular?
JC: I think that one of the most exclusive benefits of living here are the large communal gardens in the area. There are three different gardens, each with their own character. We refer to them as Three Acres, The Meadow and The Nature Reserve. They are incredibly tranquil, and also give a real sense of place and community.
KO: I live at the West End Lane end of Broadhurst Gardens, which borders The Meadow. Three Acres is available to parts of Greencroft, Fairhazel and Canfield Gardens, and the Nature Reserve to Goldhurst Terrace, Fairhazel and Greencroft Gardens.
JC: So you have these open spaces and this great sense of community, and all positioned really close to fantastic transport links into London – you’re almost spoiled for choice with buses, tubes and overground options.

Contact James Clark for NW6 Sales direct on 020 7433 6105
Contact Kate O’Neill for NW6 Lettings direct on 020 7433 6107

Last week’s meeting by the Monetary Policy Committee (MPC) resulted in the bank rate being held at 0.50%. In the last few weeks the cost of a barrel of oil has increased to just under $113 - an increase of approximately 7% - although still some way off the heady days of 2008 when it almost reached $150 per barrel. On the forecourt this translates into rising costs, and an impact on rising output prices from factories. Should oil increase to $120 per barrel this would put a further 1% on inflation compared to where we were at the turn of the year. Although these factors are a cause for concern, the bank rate was held, and I continue to believe that the most likely date for an increase is May. The Government’s budget will be announced on the 23rd March, and a change to interest rates before the budget would be unlikely. Interestingly, the biggest hawk on the committee, Andrew Sentance, will leave the MPC in June and is being replaced by Ben Broadbent, a Goldman Sachs economist. Many believe that Broadbent is another hawk, as at Goldman Sachs he has been predicting that the bank rate will end the year at 1.25% with three 0.25% increases and a further 1% on interest rates during the course of 2012.

SWAP rates are down again slightly from a few weeks ago, and I would therefore expect that lenders will no longer be looking to increase fixed rate prices and that these would stabilize. We certainly haven't seen any changes in rates over the last week or so, and lenders are now only tending to re-price in order to manage volume levels.

The question of whether a tracker or a fixed rate is more beneficial remains a close call. The average two year tracker rate is at its lowest point since 1988, whilst the average two year fixed rate is at its highest level for 10 months. The margin between the two has clearly increased, meaning that ruling out a tracker rate completely is not necessarily advisable, despite the likelihood of an increase in interest rates.

Colin Payne, Chapelgate Associates, March 16 2011