Surrey Houses - Factfile
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Prices
Something very                      strange has happened to Surrey prices. The county has many                      desirable and highly priced areas, but it used to be a general                      rule that the further you went from London the markedly cheaper                      these desirable locations became. Thus there was a gap between                      prices in Esher and, a few miles further out, Cobham and an                      even larger gap between the prices in Esher and those in Guildford.                      This is still true but to a much lesser extent, the gap has                      diminished. So that nowadays housing in and around Guildford is not startlingly cheaper than that in the north of the county.                      (A fact that reflects the growth of Guildford as a very successful                      business centre in its own right. Highly paid local employers and employees have also upped                      the prices of property in the surrounding villages.) Indeed                      you can even sometimes now pay more for the same kind of property                      in a desirable location in the south of the county than in                      a less desirable location in north Surrey. (Guildford is more                      expensive than Croydon or Sutton in all categories of housing).                      Moreover, a number of major companies have relocated staff to new office premises built near the M25                      and this has put pressure on the supply of local housing and                      pushed up prices. Generally, the east of the county and the                      area along its western boundary offer cheaper buying opportunities,                      but there are drawbacks to these areas which are the reasons                      for the lower prices.
Price falls - some myths laid to rest
Do not be misled into thinking that                              property prices in Surrey are immune from falls or                              even crashes. In the last two property slumps (1988-94 and 2007-9)                             prices fell as dramatically here as elsewhere, disproving                              the myth that the rich are somehow protected against                              economic downturns or hikes in interest rates. Instead,                              in the 1989/91 debacle it was obvious that much expensive                              Surrey property had been bought largely with borrowed                              money and many swanky homes in prestigious locations                              such as St George's Hill were repossessed by the banks.                              The last market collapse also likewise affected                              Surrey and property prices  tumbled. A lot of                              the 2006/7 boom was fuelled by high-earning employees                              in the financial industry and the shake-out in the                              City  had a negative effect on Surrey's house prices.
Whatï¿½s the market doing                            now?
23th September 2016
August lived down to its low expectations. The month is traditionally a quiet one for the Surrey property market because so many people are away on holiday and this year the mood of uncertainty that prevailed after the Brexit vote meant that expectations for August were even lower than usual. Accordingly, very few properties went under offer and new instructions were seasonally small in number, but of course there were exceptions. (To see why some media reports state there has been little evidence of a post Brexit downturn, see below.)
Last month, it was hard to find one stand-out sector of the market that fared far better than the rest although four bedroom detached houses priced up to around ï¿½1m. in the best locations had a slight edge, as did three bedroom houses, again in the more desirable areas, priced between ï¿½600k. and around ï¿½800k.. Above ï¿½1.3m. the sales situation was dire although a very few multi-million-pound properties did find overseas buyers, thanks to the favourable exchange rate post Brexit.  Luxury flats priced above ï¿½500k. struggled last month as did small houses at under ï¿½600k. and even flats at the bottom of the market were sometimes floundering. Much earlier in the year, any property that came onto the market at under ï¿½250k. would have had several buyers lining up before the ink was dry on the sales details. This was not the case last month.
New instructions trickled into estate agents' offices at a typical August rate and actually there did't seem to be a significant post Brexit effect pushing the numbers down even further. Consequently, with the small amount of sales agreed during the month, the supply of properties for sale in Surrey at the end of the month was relatively good.
Prices
In common with the two previous months, August saw a large number of price reductions in Surrey. These were across the board in all price sectors. The discounting was not huge but often came after earlier price reductions so the culminate effect was sometimes considerable, for example, a two bedroom house in Woking reduced by 21.7%  from ï¿½315k. to ï¿½270k., a four bedroom flat in Weybridge reduced by 24.6% from ï¿½900k. to guide price of ï¿½750k., and at two extremes of the market,  a one bedroom flat in Kingston reduced by 13.8% from ï¿½289,950 to ï¿½250k. and a plot of land in the environs of St. George's Hill reduced by 33.3% to a guide price of ï¿½1m..
Paradoxically, new instructions tended to carry optimistic valuations, especially for four bedroom houses priced below ï¿½1.3m. and three bedroom houses priced below ï¿½1m.. This has led to huge price inconsistency across the market.
The Future?
While the autumn market is usually a strong one in Surrey,  this year we do not expect it to stage a significant rally after the summer slowdown. Post Brexit uncertainty will continue to be a negative factor. It is worthwhile remembering that Surrey as a whole voted to remain in the European Union (albeit by a small margin) and therefore much of its population will be more cautious about the future than  residents in the counties that voted to leave. Those who are needing or really keen to buy are likely to wait until the new year to see how the both the economic situation and the state of the housing market are then. Already buyers are starting to realise that they may currently have the upper hand in a weak market and that prices are likely to be very negotiable.
It was very interesting to see that the latest Land Registry statistics recorded the lowest ever number of sales in Surrey for the month of May (the online published statistics go back to 1995, the June figures are not yet available). This is remarkable and so revealing about the state of the market. The actual figure for May 2016 was 1,158 sale completions compared with 1,614 in May 2015 and, for example,  2,608 in May 2009. There were many factors behind the huge drop in the number of sales, not least of which was the run-up to the Brexit vote, but possibly the biggest factor was the rush to beat the extra stamp duty on buy-to-let and second homes introduced in April, leading to purchases being brought forward and a huge spike in sales figures in March this year (2,270).  As sales were so low in May, we cannot see that they can improve much in the final months of the year. Vendors will need to be very cautious with their pricing if they want to secure a buyer. Only the very best properties, very realistically priced, are likely to sell in the months ahead.
Note that this week the government has issued, via the Office of National Statistics, a statement that there has been, "little impact of the Brexit vote on the UK economy so far". The report includes reference to the housing market saying that statistics from the Land Registry reveal little negative effect so far. The latest Land Registry statistics are for July (though published in September) and since the Land Registry records completed sales these will mostly relate to sales agreed, and probably contracts exchanged, before the referendum vote. We will have to wait until October and even November for the Land Registry statistics to reflect in large measure the effect of Brexit, for figures relating to sales agreed post Brexit during the months of July and August.  It is worrying and disappointing when the Government appears to interpret official statistics so misleadingly.
Similarly this week the Council for Mortgage Lenders has announced that mortgage lending in August was the highest figure for the month since 2007 and accompanies the figures with the statement that fears over the fallout from the Brexit vote on the housing market proved to be " wide of the mark". However, the figures include remortgaging (the Bank of England cut interest rates to a new low of 0.25% in early August) and any totally new mortgages recorded in August are for mortgage advances (i.e. when the money is handed over), not mortgages agreed, so many will relate to sales agreed prior to Brexit (with people moving and completing in the August summer holiday period). Infuriatingly, the BBC headlined the "highest figure since 2007" as data supporting no post Brexit fallout, without informative comment or analysis. Oh dear, the housing market is still all smoke and mirrors.
As always, buyers should exert caution in assessing the value of a property. A house or flat in only worth what  someone is willing to pay for it at a certain time and if funding is available and affordable.
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