Moving experience: week three

By THIS IS MONEY
Updated:

 

MORTGAGE rates were cut last week. I know it's a bit early, but I was hoping London's increasingly jittery first-time buyer - a species with an insatiable appetite for pricey property just a few months ago - would instantly march round to my flat and slap an offer on my mock-Indonesian coffee table (it is Islington, after all).

And remember, it was the fall in the base rate from 6% to 4% in 2001 that fuelled the boom that year and in early 2002.

This latest cut (from 4% to 3.75%) plus the prospect of another one by summer, according to economists, might be the spark the capital's sluggish property market needs.

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However, judging by the fleet of green BMW Minis used by Foxtons, a rival agent to mine, clogging the parking spaces along Islington's Upper Street on Saturday afternoon, rather than taking clients to see properties, it would seem the rate cut has failed to work its magic this time round in North London.

I'm selling a one-bed 'lower-ground floor' flat (that's not a basement, honest) but have had zero interest in three weeks. My agents, whose website still isn't working, told me their total viewing for all properties for the week mounted to a few half-hearted efforts on Saturday afternoon.

To add to the gloom, the Government's official Land Registry figures confirmed what most sellers had suspected: London prices fell for the last three months of 2002. The average fall was 3%, but the worst was posh Kensington & Chelsea, with a painful 12% plunge. In Islington the fall was less than 1% - and, even better, Islington flats rose 4% in those months.

Views among the experts are mixed as to how to play the property game from here. Property analyst Hometrack says the lower end of the market will remain buoyant, especially in less wealthy areas. So if, in some bizarre scenario, you were hoping to trade in your one-bedroom Stepney flat for a three-bed Notting Hill mews, you'd be laughing.

But a City economist told me he expected London's rising jobless tally would ensure house prices go nowhere this year, and would maybe fall further.

A journalist friend of mine at ITN is hoping to cash in by selling up his one-bed pad in West London and renting for 12 months so he can buy a two-bed place once prices have fallen. Theoretically a great plan - but if people are already spotting this 'opportunity' then the chances are it's gone. And after all, another friend suggested doing the same thing two years ago after the price surge of 1999 and 2000. Then prices surged another 40%.

andrew.oxlade@anm.co.uk

• Check out house prices in your area by entering a postcode at Hometrack.co.uk or at the Land Registry

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