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LONDON

Mark Hughes

It reads like a page from a celebrity Who's Who. The actresses Sadie Frost and Helena Bonham-Carter, actors Bob Hoskins and Derek Jakobi, comedian David Walliams, musician Noel Gallagher of Oasis fame and multi-millionaire record producer Trevor Horn all live or have sold a home in Steele's Road in the highly sought-after London postcode of NW3.

One of their neighbours is estate agent John Morris. He said that when he helped set up his agency, Day Morris, in 1989, an average town house cost about GBP250,000 (HK$3.8 million ). Now it would fetch as much as GBP1.5 million.

This year, Mr Morris has seen prices rise 15 per cent. Hoskins bought his house for less than GBP1 million a decade ago. He has just sold it for GBP7.5 million.

But, Mr Morris says, there is a difference in today's market. It is not like any other he has experienced in the past 18 years. The number of houses for sale is at an historically low level yet the number of buyers is soaring.

And the consequence, he says, is a cutthroat market and the return of gazumping, where buyers renege on an offer they have accepted when someone else turns up with more cash.

'We have 1,000 customers registered with us who are seriously looking to buy a property, but an embarrassing shortage of sellers. It's in single figures,' said Mr Morris.

He cites a four-storey unmodernised house on his books which had been lived in by members of the same family since it was built in 1880. It has dry rot, a filthy kitchen and damp. It suffers from subsidence. It is on a busy road opposite a council estate notorious for crime. Mr Morris valued it this year at offers above GBP795,000. So far he has had two bids for more than GBP900,000.

'People are having to buy places they don't particularly like just to get their foot on the property ladder,' he said. 'They are having to compromise because if they don't move quickly, it will cost them even more the following week.'

Mr Morris says he isn't entirely against gazumping, saying it's in his clients' interests to get the best possible price. To keep matters as honourable as possible, he encourages people to offer more than the asking price and then initiates a contracts race. The first person to get their paperwork in order wins the property.

'In any industry where there's money, there is greed,' he said. 'It's a fact of life. You can price properties as high as you dare and people will offer more. People make the market.

'There is so much more money in this country now than there has been before. Many families who want a bigger home are being thwarted.'

Mr Morris cites the case of a badly rundown villa on exquisite Downshire Hill whose eccentric elderly owner was murdered in the garden. 'It was put up for sale at GBP1.5 million and sold for GBP3 million,' he said.

For many people, their house is their pension. 'When people find a home they finally want, they tend not to move until they retire.'

The plethora of television programmes devoted to doing up property had also made people a lot more savvy, said Mr Morris.

'It's become a very businesslike market. And I can't foresee it crashing unless the equity markets tumble or interest rates rise from their current 5.25 per cent to levels of 15 or even 17 per cent seen in the 1970s. And I can't see that happening.'

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