Paying for a little luxury

ONCE Tamsin Fox secured her dream job, her thoughts turned quickly to her dream home.

Tamsin, 29, from South London, has no links with Brighton and Hove. Her family live in Surrey and her partner is from Newcastle.

But Brighton holds a special place in their hearts. The couple love the city and once they decided they wanted to buy their first home together, they knew it was the only place they wanted to be.

Tamsin, who works as a sub editor, has been house-hunting for several weeks. She said: "I've seen two-bedroom flats for £120,000 in decent areas of Brighton and Hove.

"In London, first-time buyers have a choice between living in a palace in a crime zone or living in a hovel in a nice area. Even then you're looking at a minimum of £200,000 for a flat.

"Commuting will be considerably more expensive but we can manage it and we don't have a choice. It's move out of London or rent forever."

Tamsin is just one of the dozens of London residents who each weekend make the short journey to Brighton to see what the city's property market has to offer.

That demand is a key factor in pushing up city house prices to their highest recorded levels.

SouthCentral has recorded a small but recognisable increase in ticket sales to commuters travelling between Brighton and London in the last year.

But now there are signs the top end of the market - homes selling for upwards of £750,000 - is beginning to slow down.

Londoners make up the majority of that market but although people like Tamsin are still choosing to buy here, they are becoming more choosy about the properties they secure.

Yesterday, the Royal Institution of Chartered Surveyors (RICS) warned that with stock market uncertainty bringing the threat of major redundancies to financial institutions, and the end of multi-million pound bonuses, interest was waning in the luxury home market in the South-East.

While property costing up to £750,000 was selling well, there was evidence of declining interest in houses priced between £1 million and £2 million, said RICS South-East Chairman David Tuffin.

He said some developers were facing the threat of cash-flow difficulties or having to drop their prices, which could have a ripple effect throughout the housing market.

However, the latest RICS survey revealed prices at the lower end of the market were rising again after the summer slowdown.

Brighton and Hove estate agent Mishon Mackay has a number of properties on its books valued in excess of £750,000.

In this week's Property Argus, it was offering a five-bedroom home in Dyke Road, Hove, for £975,000; a six-bedroom house in Tongdean Road, Hove, for £1.1 million; and a five-bedroom mansion in Roedean Crescent, Brighton, for £4 million.

Simon Caplin, senior sales negotiator for Mishon Mackay, said such properties were still selling but they had to be in the right place, for the right people at the right time.

He said: "I think people who are paying £750,000 plus for a property will pay attention to the stock market and invariably a lot of their purchasing funds will come out of realising stocks and shares.

"If the value of the shares have decreased, as they clearly have at the moment, that is going to discourage people from selling them and putting that money into property.

"However, in the past six weeks it has become clear that if something comes up at the right price here, then sales are able to be achieved without too much difficulty.

"I just sold a substantial property in Withdean Road within ten days of it coming on to the market. It sold for almost £1 million.

"It was a very imposing property with a lot of accommodation and proves that if you sell the right property to the right people you can still sell it quickly."

Mr Caplin said buyers at the top end were becoming increasingly keen to ensure they were getting value for money.

He said: "If a house came on the market at £850,000 and it had all the requirements of a £850,000 house, I would expect it to sell within a four to six-week period.

"But if it came on at £925,000, it will sit around and not sell.

"As recently as last year, buyers may have still been able to achieve their premium price because values of stocks and shares were fairly high.

"But because shares have gone down in value they are less keen to cash them in."

The top end of the market is increasingly sustained by Londoners.

Mr Caplin said: "About 60 per cent of people on our mailing list looking to buy at that level are from London.

"Two years ago the figure was more like 40 or 50 per cent. A £1 million house here is at least half what it would cost them up in London."

Kemp Town-based estate agent Jonathan Rolls also deals at the top end of the market, specialising in period properties in Sussex Square, Lewes Crescent, and Arundel Terrace.

Asked if there were signs the luxury housing market was slowing in Brighton and Hove, manager Grant Phillips refused to comment.

But people on London wages, such as Tamsin, continue to sacrifice proximity to their work for a prime spot by the sea.

The estate agents do not mind but not everyone is happy about it.

Steve Foster, of Unison, said: "It is all very well building these luxury developments but people who work and live here can't afford them.

"The market is getting very polarised between an upper strata of high earners and thousands of low-paid public sector workers who can't find anywhere.

"The Government must focus on reinstating housing for all as a priority. Public housing investment from Government has been more than halved.

"The city council should be given the money it needs to buy up the brownfield sites, so they can be used for public housing. We have a lot of catching up to do."