Southall Property Report: Are we heading for oversupply?
Anyone who lives, works or even passed through Southall in the past year couldn’t have failed to notice the abundance of large-scale property development projects currently underway. Ranging from solitary apartment buildings to sprawling new housing estates, it seems every derelict building or patch of brownfield land has a planning application in the pipeline.
Initially, the news of developments such as Southall Waterside and Southall Village were met with much fanfare. After all, no one would argue that Southall didn’t need more housing stock, and regeneration of unused land would create jobs and stimulate the local economy. Unfortunately, with the proliferation of planning permission for many more developments in Southall, residents and businesses are right to begin questioning the rationale of concentrating so many residential developments in the most densely populated area of Ealing borough. How will the roads cope with the increased traffic from all these new homes and apartment blocks? What of GP places, schools, hospitals, and pollution?
These are questions many residents feel haven’t been addressed, either by the local Council or the developers. The developers would argue a borough-wide approach isn’t their responsibility; they can hardly be expected to cut back or vary their plans because of the Council’s decisions on other projects. Ealing Council, in its defence, may fall back on its reliance on new properties and their council tax receipts to fill the void left by central Government cuts to its budget. But that alone wouldn’t satisfy residents, who would look dubiously eastward down the Uxbridge road and wonder why leafy Ealing central wasn’t taking on an equal share of the burden.
To compound matters further, recent controversy relating to air pollution at the Southall Waterside site as left many residents feeling that the Council are ignoring their concerns. Council leader Julian Bell even ruled out conducting independent air quality tests partly due to the costs involved, never something that was going to go down well with residents.
Looking beyond the current issues, what will all these developments mean for Southall and the property market when they’re all complete? First, there seem to be many more apartments currently in development and coming on the market in Southall than either terraced or semi-detached houses. Over 130 apartments are currently on the market in June, a 29% increase on a year earlier. With this rise, the average time these units spend on the market has also increased by 14%, while prices have remained largely flat, rising just 1% in the previous 12 months for apartments, compared to double that for terraced and semi-detached properties in the area.
With many more apartments still to be completed, it would be difficult to envisage any change to the price action currently in play. With an abundance of stock, buyers can take their time putting in offers and negotiating their price, putting more pressure on any upward price movement and extending the time on the market for these properties further.
There’s also the question of demand, how many people are there that need or want to live in apartments rather than a house? Apartments tend to attract first time buyers rather than those moving or upsizing, but with average prices in the area over £300,000, are they really that affordable for those looking to get on the housing ladder? What’s more, with the recent stamp duty changes to Buy-To-Let mortgages and changes to tax breaks for landlords, fewer BTL investors will be looking to put their money into property.
No commentary on the property market would be complete without mentioning the ‘B’ word. The UK’s inability to decide whether or not to leave the EU has created a sense of uncertainty that has spread out from London and to the rest of the country. The clearest way this impacts on property in Southall is buyers believe they can get a better price the longer the uncertainty continues and hold off making a purchase. Sellers, conversely, refrain from putting their properties on the market until Brexit is behind us one way or the other.
It seems prices will continue to rise, albeit slowly, for traditional housing stock that is becoming ever rarer as the number of apartment blocks in development continues to grow. At the moment, the local market has absorbed the greater influx of apartments on the market, prices have remained stable and stock is eventually selling. Whether this can continue is another matter. While the new build apartments might find buyers, owners of older apartments or maisonettes may struggle.