I had an interesting conversation with a local Epsom accountant the other day. He is quite an observant chap (I know this because I have known him for many years. .. but I suppose you have to be to be an accountant!). Anyway, he mentioned a few things he had noticed recently in Epsom, one that Epsom property prices had gone up in the last few years, but nowhere near the growth levels that were being achieved in central London and secondly, that he thought the number of for sale boards in Epsom (and more importantly ones with sold slips on them) had increased over the last couple of years.
The rate of house price inflation in Epsom continues to slow with growth of 12.4% in the 12 months
to February compared to 14.1% just under six months ago, according to the latest Land Registry
data. However, there is considerable local variation with house price growth ranging from 13.3% in
Merton as an example to 15.6% in Sutton over the last 12 months.
Whilst Epsom hasn’t seen the 20%+ per year in house price growth of London over the last couple of
years, Epsom has seen a sharp uplift in the number of properties sold throughout 2014 as base line
demand for housing grows, which suggests there is substance to the recent pick-up in house price
growth in the town. Since the Second World War in the UK, when the number of properties sold has
grown, property values grew soon after. The 4.81% uplift in property transactions in Epsom in 2014,
compared to 2013, indicates the most significant recovery in house market activity in Epsom
(outside London) since 2007.
When you compare Epsom with London, you could be looking at two different countries. In London,
the mid/late teens house price to earnings ratios are impacting demand (i.e. the average property
value is often 15 or 17 times the average wage in London... in fact in Knightsbridge the ratio can be
30 to 1). However, the number of people wanting to sell has dropped considerably, meaning that
falling sales volumes combined with a general slowdown in activity in the run up to the General
Election are resulting in lower mortgage approvals for home purchase.
Transactions are a great indicator for house prices. The acceleration in house price growth in London
in the last two years was preceded by three years of rising transactions. A similar pattern is being
registered in the Epsom area, as pent up demand returns to the market supported by low mortgage
rates and an improving economic outlook.
But before you get the Champagne out, while the uplift in activity is welcome news, the number of
Epsom property sales in 2014 are still 22.3% lower than the level seen in 2007 and property values
are 16.9% above the 2007 levels. The ongoing housing recovery is far from broad based and remains
focused on middle to higher value areas within Epsom, where households have equity and find it
easier to access mortgage finance. If you want to know more about the Epsom Property Market,
please keep checking the Epsom Property Blog or send me an email to