Property News: Prices up but supply still stifled

MatthewSheldon_grey

Two months on from my last article, and it is very interesting to see where the property market now finds itself. Although confidence has very much returned in the knowledge we have a Conservative government, the initial knee-jerk reaction to the election result hasn’t necessarily followed through and although the market has improved since early May, it hasn’t developed in the manner that many people were anticipating.

Prices are most definitely on the rise: one national newspaper reported that asking prices were up as much as much as 17% in London following the election. This is certainly supported by some the offers that we have been receiving recently, which have broken records for the area. West Hampstead in particular is benefiting from its neighbouring areas becoming too expensive, which is inflating the volume of applicants considering the area and therefore pushing up the prices. Family houses are particularly well received in terms of the value for money on offer compared to what is being sold on the other side of the Finchley Road.

One factor that hasn’t changed dramatically over the past couple of months is the level of available property to buy. I regularly speak to potential purchasers frustrated with the lack of homes for sale. The Bank of England reported for the month of May that one in three mortgage applications were for re-mortgaging.

What are the consequences of these figures? The surge in house prices over the last few years has given many the opportunity to buy their next home without having to sell their current home, which is having an impact on instruction levels. This has a knock-on effect on those potential vendors who do need to sell to move as they simply aren’t seeing enough property come onto the market to give them the confidence to make their own home available. The lack of stock in some instances is proving a stumbling block for agreeing sales and is delaying a number of transactions from exchanging contracts. One of the national agents reported this May that they were 17.7% down on exchanges compared with May 2014.

It is widely expected that the autumn will be the strongest period of the year. The initial euphoria of the election result has cooled slightly and it is clear that the market is still finding itself. Once that has happened, I’m very much expecting that we will see a fair balance of supply and demand as well as realistic price growth.

Matthew Sheldon
Manager
Benham & Reeves
West Hampstead
020 7644 9314
Follow @BenhamReeves

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Property News: The impact of the election on house prices

MatthewSheldon_grey

The waiting is finally over. After months of predictions and speculation, we now know that the country will be led by a Conservative government. So where does this leave the property market? Generally speaking, house prices increase more under a Tory government. In fact, according to the Nationwide house price index, since 1970, they have risen at an average of 19 percent per year compared to 10 percent a year under Labour administrations.

It is widely expected that this trend will continue. The threat of a ‘Mansion Tax’ has now been quashed and this will prevent any potential rigidity that there would been in pricing at around the £2 million mark. Owners of properties in this price bracket now have a degree of flexibility around the asking price they can set and this will allow the market to dictate what each property is actually worth. The Mansion Tax would have devalued those homes worth more than £2 million and that could well have had ramifications for prices further down the market.

Buyer confidence will certainly return. I have been dealing with a few situations where prior to the election we had received offers that weren’t acceptable to our clients. The potential buyers came back to us and said that they would consider increasing their offer once they knew outcome of the election. Within hours of the results, they increased their offers. We also had new instructions and only a day later, one of those new properties received an asking price offer.

Another real problem over the past few months has been the lack of supply, in particular between £1.5 and £3 million. There have been very few family homes for buyers to choose from and that should now change for obvious reasons. However, demand will increase too and it will be interesting to see where the market goes from here.

Are we going to see another housing bubble? It is a distinct possibility, particularly in the short term as I feel that the election result provides a real shot in the arm for the market. In the long term, however, it is imperative that the market reaches more of an equilibrium. According to Nationwide, house prices are now 9 percent below their peak, suggesting positive price growth for at least five years. In order to create stability over the longer term and to encourage a more gradual rise in house prices, it is crucial that more land is released for house building. The Conservatives plan to deliver 200,000 new homes, which they are prioritising for first time buyers. This will certainly come as welcome news to the house building industry and will go some way towards aiding a more sustainable property market in the long run.

There is certainly an element that the market will still need to find its natural level, but the outlook is certainly positive. An increased level of supply, with the potential for a measured house price growth over the coming years makes this a really good time for buyers and sellers alike.

Matthew Sheldon
Manager
Benham & Reeves
West Hampstead
020 7644 9314
Follow @BenhamReeves

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Property of the Month: May

This month’s property from Benham & Reeves is a large 2-bedroom flat on prestigious Crediton Hill.

Crediton Hil
West Hampstead, NW6
£825,000 (Guide price)
Sole agent

CreditonHill exterior

CreditonHill living room

CreditonHill bedroom

CreditonHill view

An excellent two-bedroom apartment of approximately 850 sq ft on the second floor (top) of an attractive Victorian conversion on one of West Hampstead’s premier roads.

The apartment, which is particularly bright throughout, comprises a generously sized master bedroom that boasts fabulous views of the neighbouring gardens and has access to an en suite, a second double bedroom, a spacious reception room, separate kitchen and an additional bathroom. The property has a rather homely feel to it as well as a certain charm and would make an ideal rental investment or first time purchase.

Crediton Hill is situated just moments away from the amenities, leisure facilities and multiple transport links that West End Lane has to offer whilst being a not too distant walk from the open green spaces of Hampstead Heath.

2 bedrooms * 2 bathrooms (1 en-suite) * reception/dining room * kitchen/breakfast room * residents parking zone

West Hampstead Sales Office | 020 7644 9300
106 West End Lane London NW6 2LS | Email: ku.oc1506410211.r-b@1506410211selas1506410211
http://b-r.co.uk/property/details/100135672

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Property News: Pre-election uncertainty holding high-end market back

MatthewSheldon_grey

New year, new face. I am the new manager of Benham & Reeves’ West Hampstead office. I have arrived from our Hampstead Office, having previously worked for a large international company as well another local independent company.

It has been an interesting start to the year. Available properties are relatively thin on the ground and one would be forgiven for thinking that this would mean be a lot of competition on each available instruction, as the number of buyers certainly exceeds the level of supply. However, so far that hasn’t appeared to have been the case and we are in a very price sensitive market. If the asking price of the property is correct and seen as reasonable then we are seeing a strong number of viewings, followed by relatively quick interest, leading to an agreed sale. Those properties that are deemed expensive are sitting on the market with too few viewings and then end up having to be reduced. The upshot can actually be that they sell for less than they are worth as the aggressively high initial asking price creates a negative sentiment around the property the longer that it remains on the market.

These market conditions are in keeping with recent reports about mortgage lending. According to the council of Mortgage Lenders, lending in January was down 14% from December and 11% from January last year. Buyers have to feel tempted to come and have a look at properties in order to act, and some of the unrealistic prices that are being asked are leading to a reduction in the lending figures as well as sales figures, which were down by 6% according to the HMRC compared to January 2014.

Of course, for those properties that have something a little bit extra special, it’s still realistic to achieve a premium figure. We were recently instructed on a property at a prime South Hampstead address – an absolutely stunning flat. The marketing figure was correct, it attracted a decent level of viewings, and is now under offer at what will be a record pound per square foot price for its road, should contracts be exchanged.

If we look at the market for properties above the £2 million mark, then we certainly see the effects of the upcoming election. The uncertainty surrounding the threat of a “Mansion Tax”, is causing people to think twice about moving before May. Anyone who owns a home worth more than £1.5 million is starting to feel a little bit unsure about the potential repercussions should we see a Labour or Labour-led government, and this is certainly causing buyers and sellers in this price range to hold fire. That explains both the distinct lack of available property above £2 million, but also between £1.5 and £2 million. The amendments to the stamp duty thresholds have also had an impact in this sector. A number of transactions were either renegotiated or, in some cases, fell through, as buyers were hit with a much greater tax bill than they were expecting when a sale was originally agreed.

Having said all of that, if the asking price is realistic, there is still interest in this area of the market. We were instructed to sell a house on Goldhurst Terrace, at £3.75 million, and simply due to the lack of stock available at this price, there were four buyers interested in the house and it is now under offer. I have been suggesting to some potential vendors over the past couple of months that it may be a good time to think about selling as while most people are unsure about moving given the uncertainty, there’s less competition from other sellers, and there are buyers out there. After the election, we could see a lot more coming onto the market.

What is a certainty, is that I am very much looking forward to there being clarity and to what will hopefully be a very stable market. People were of the opinion that the early months of last year were good for estate agents, but those of us in the business knew all too well what was to follow. It appears that the market is more realistic now and there has undoubtedly been a correction in the prices. Once the uncertainty is cleared up, I am confident that we will see a much healthier balance within the market.

Matthew Sheldon
Manager
Benham & Reeves
West Hampstead
020 7644 9314
Follow @BenhamReeves

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Property of the Month: March

This month’s property from Benham & Reeves is a 4-bedroom Victorian home near Hampstead School.

Richborough Road
West Hampstead borders, NW2
£1,150,000
Sole agent

Richborough Road external

Richborough Road kitchen

Richborough Road living room

Richborough Road garden

A stunning four bedroom semi-detached Victorian home of approximately 1500 sq ft. Presented in excellent decorative order throughout, featuring two wonderful reception rooms, both with high ceilings, ornate cornicing, as well as working fireplaces. The property has a fabulous kitchen diner with doors opening out on to a spacious patio garden area, the garden can also be accessed via the side of the house. Comprising three generously sized bedrooms, one with a luxury en suite bathroom, a single bedroom and another shower room. This property, which is one of the larger houses on Richborough Road, also boasts having an off street parking space for one small car.

Located within easy reach of both Kilburn (Jubilee Line) and Cricklewood Thameslink stations, the property is also located a not too distant walk from the popular Mapesbury Dell and benefits from being situated in the Camden School’s catchment area. The house has potential for further scope to improve and extend the accommodation by extending into the loft space (subject to the necessary consents).

Family homes offering such fantastic entertaining space and in this condition are rarely available to the open market and early viewing is advised.

4 bedrooms * en-suite shower room * bathroom * 2 reception rooms * kitchen/dining room * guest WC * front & rear gardens * off-street parking for one car

West Hampstead Sales Office | 020 7644 9300
106 West End Lane London NW6 2LS | Email: ku.oc1506410211.r-b@1506410211selas1506410211
http://b-r.co.uk/property/details/100134717

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Property of the Month: January

This month’s property from Benham & Reeves is a 1-bedroom flat in West Hamptead Square.

West Hampstead Square, West End Lane
West Hampstead, NW6
£579,950
Joint agent

West Hampstead Square_living room

An opportunity to buy an ‘off plan’ 1 bedroom apartment on the second floor of Block C in the brand new West Hampstead Square development adjacent to West Hampstead tube station on West End Lane. Due for completion in Spring 2015 these flats have proved enormously popular with end users and investors alike due to the location and high end specification.

Bedroom * bathroom * reception room/open plan kitchen * balcony

West Hampstead Sales Office | 020 7644 9300
106 West End Lane London NW6 2LS | Email: ku.oc1506410211.r-b@1506410211selas1506410211
http://b-r.co.uk/property/details/100133557

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Property of the Month: September

This month’s property from Benham & Reeves is a 3/4-bedroom apartment in need of work on Gondar Gardens.

Spring Mansions, Gondar Gardens, West Hampstead, NW6
£865,000
Sole agent

Spring Mansions_external

Spring Mansions_reception

In need of complete modernisation, a 3/4 bedroom mansion flat offering bright and flexible accommodation comprised of rooms with high ceilings, period features and far-reaching views, arranged over the top floor of an end of terrace characterful and grand period building.

Gondar Gardens is a quiet residential road located off Mill Lane and within easy reach of the restaurants, cafes, shops and excellent transport Links of West Hampstead.

3/4 bedrooms * bedroom4/reception room * bathroom * reception room * study * kitchen * residents parking zone

West Hampstead Sales Office | 020 7644 9300
106 West End Lane London NW6 2LS | Email: ku.oc1506410211.r-b@1506410211selas1506410211
http://b-r.co.uk/property/details/100133918

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Property of the Month: July

This month’s property from Benham & Reeves is a two-bedroom apartment with a garden on Mill Lane.

Mill Lane, West Hampstead, NW6
£600,000
Sole agent

Mill Lane 2 garden

Mill Lane 2 kitchen

Mill Lane 2_bedroom

Mill Lane 2 reception

A beautifully presented 2 double bedroom garden apartment forming part of a period building conveniently located on vibrant and up-coming Mill Lane. The property offers spacious and modern accommodation in ‘ready to move into’ condition. Of particular note, and unusual for this location and size of property, is a lovely south facing courtyard garden which can be accessed directly from either the master bedroom or reception/kitchen. Mill Lane provides easy access to the many transport links, cafes, restaurants and shops of West Hampstead. Early viewing is advised.

Master bedroom with en-suite bathroom * second bedroom * shower room * large reception room * kitchen * cellar * rear garden * private off-street parking for one car

West Hampstead Sales Office | 020 7644 9300
106 West End Lane London NW6 2LS | Email: ku.oc1506410211.r-b@1506410211selas1506410211
http://b-r.co.uk/property/details/100134294

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Property of the Month: June

This month’s property from Benham & Reeves is a two-bedroom apartment with a garden in Fawley Road.

Fawley Road, West Hampstead, NW6
£1,300,000
Joint agent

Fawley Road_reception

Fawley Road_patio

Fawley Road_shower

Fawley Road_garden

A stunning 2 bedroom garden apartment arranged over the raised ground floor of a period house on a quiet, treelined road only moments from the shops, restaurants and excellent transport links of West End Lane. Presented in excellent internal decorative condition, the flat has been lovingly refurbished using the finest materials and successfully blends modern interior design with original period features. The large reception room leads directly out to a paved area ideal for entertaining, which in turn leads to a generously sized rear garden mainly laid to lawn.

Private off street parking for one car adds convenience and further value to this ‘must see’ property.

Master bedroom With en suite bathroom * second bedroom * shower room * large reception room * kitchen * cellar * rear garden * private off-street parking for one car

West Hampstead Sales Office | 020 7644 9300
106 West End Lane London NW6 2LS | Email: ku.oc1506410211.r-b@1506410211selas1506410211
http://b-r.co.uk/property/details/300220261

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Build high or fiddle while Rome burns?

In my last Property News article I extolled the virtues of a rising London property market and the benefits to the economy of foreign investment via the ‘multiplier effect’. Some of you may be surprised to learn that I’m not a capitalist at heart, but I suppose I was just getting fed up with all of the constant talk of housing bubbles and ‘where will it all end?’. It was more a case of: there’s very little any of us can to do change it, so it may be better to embrace the positive aspects of it. But is that true and what might be the long term consequences?

Clearly, opinion will be divided based on whether you are a property owner or not. But don’t we all have a responsibility to future generations to consider the very serious situation that London and the UK finds itself in? The harsh reality is that we are not building enough homes to satisfy the ever increasing population. A mixture of red tape planning bureaucracy and policy, NIMBYism and economic conditions mean that we have very little hope of making this any better without serious reform and a change of policy and attitude.

The Barker review highlighted the severity of the situation back in 2004, and the Department for Communities and Local Government now estimates that we need to build 232,000 new homes in the UK every year between now and 2033. At the moment, only 120,000 homes are being built each year. The Greater London Authority’s 2012 Round Projections of population growth for London shows an increase of 2 million residents between now and 2034. This doesn’t account for the changing way in which we now live; more single person dwellings or for our longer life expectancy.

The numbers don’t add up and it really cannot be any surprise that we have double digit growth in the London property market. What is more concerning is that we don’t seem to have any policies that are directly addressing this problem.

The last Labour government’s response to the Barker report was to introduce a regional level of planning under which each region had to file its own plan outlining policy for development within its region. By the time the coalition government came to power, very few of these regional plans had been filed and approved and the new government decided that these only created more red tape and that the answer to our planning problems was to decentralise planning policy by empowering local communities and increasing permitted development rights.

The grand plan is to let local residents decide on what’s best for the area and to free up buildings and sites for development by removing red tape. The regional tiers were promptly abolished and the Localism Act became law in 2011.

Nick Clegg declared that the Localism Act was “a move from big government to Big Society”. He went on to say “It marks the beginning of a power shift away from central government to the people, families and communities of Britain”. Great sound bites at a time when trust in government was at such a low point.

The Localism Act allows for the creation of Neighbourhood Development Forums (NDFs) which can formulate a Neighbourhood Development Plan (NDPs) outlining policy for the designated area and identifying sites for development. The potential problem with such plans is that they must be approved by the local authority and also comply with the local authority’s planning policy and the National Planning Policy Framework (NPPF). In London, they also have to comply with the London Plan.

It seems to me that actually nothing is being decentralised, as all plans have to comply with central policy to be approved. In fact, West Hampstead’s NDP, which was one of the first, is still awaiting final approval from Camden.

Another worrying aspect of these plans is that they cannot actually veto any planning decisions, but they do present another layer of statutory planning guidelines that developers must adhere to and that objectors can cite in any attempts to delay or block proposals.

There will also be a concern in some areas that NDFs may not be representative of the whole community, although local authorities do require evidence that significant efforts have been made to address this before granting approval.

Preservation of the look and feel of our area is also a concern for those living within it. The rows of Victorian terraced houses in West Hampstead and the red brick properties and mansion blocks of South Hampstead are prized and protected assets of our area. But how can we balance the preservation of such areas with the need for building more homes? The Camden plan for West Hampstead says it “expects development in the growth areas to be predominantly housing and seeks to encourage high density development”. By contrast, the local NDP states

Recent development in the past decade has raised a number of concerns, particularly as the population of the area grows, more new homes are built and the population density of the area increases. For many residents the height of new buildings is a key issue. In an area largely made up of houses and buildings between 2 and 5 storeys high, new developments of six storeys or higher are likely to cause strong objections.

Such opposing views must be commonplace across most of London and highlight the difficulty of building enough new homes to satisfy demand whilst preserving the local environment and feel of a community.

West Hampstead has six potential sites identified for redevelopment and arguments over the height and size are likely to be ongoing with planners and the NDF for some time.

It is surely inevitable that we will have to give up on these principles of preserving the height of buildings in London. Sci-fi movies show a vision of future cities with buildings reaching into the clouds with a mix of social and private housing. If we want to provide future generations with affordable housing in London whilst protecting our countryside should we not be considering constructing these buildings now? Such projects would also ease the burden on transport infrastructure and improve the quality of life of key workers forced to move increasingly further out due to increased property prices. Other cities in the world have already accepted the inevitability of this.

The key objective of the NPPF is to achieve sustainable development. Sustainability means building that would not be detrimental to future generations. Isn’t it time we developed our planning policies to cope with these future demands rather than fiddling while Rome burns?

Darryl Jenkins
Associate Director
Benham & Reeves
West Hampstead
020 7644 9300
Follow @BenhamReeves

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Property of the Month: May

This month’s property from Benham & Reeves is an unusual two-bedroom apartment in South Hampstead.

Woodchurch Road, South Hampstead, NW6
Guide price £950,000
Sole agent

Woodchurch Road reception

Woodchurch Road bathroom

Woodchurch Road kitchen

Woodchurch Road exterior

Forming the upper parts of a handsome red brick Villa originally commissioned and built for the renowned Victorian artist John Seymour Lucas and designed by Sydney Williams Lee, a fabulous and unusual 2 bedroom apartment. This part of the house was specifically designed as the artist’s studio and is where John Seymour Lucas would have painted many of his seminal works. The studio is now a spacious open plan reception/dining room/kitchen with the double height vaulted ceiling and large window making this room a wonderfully bright and tranquil space with far reaching views over London’s skyline.

A delightful mezzanine area could be used as either an extra sleeping area for guests or as a study and there is fantastic storage space in the attic. If you have a good head for heights there is access to an unofficial roof terrace for even better views on a clear day.

Woodchurch Road is located in the popular and leafy South Hampstead Conservation Area and provides easy access to the transport links at both West Hampstead and the Finchley Road.

Properties of these proportions and light are rarely available to the open market and early viewing is advised to avoid disappointment.

2/3 bedrooms * bedroom 3/mezzanine * bathroom * reception/dining room * kitchen * eaves storage * residents parking zone * energy rating E

West Hampstead Sales Office | 020 7644 9300
106 West End Lane London NW6 2LS | Email: ku.oc1506410211.r-b@1506410211selas1506410211
http://b-r.co.uk/property/details/300219306

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Property of the Month: April

This month’s property from Benham & Reeves is a three-bedroom flat in one of the most desirable streets in West Hampstead.

Marlborough Mansions, Cannon Hill, West Hampstead, NW6
£1,295,000
Sole agent

Marlborough Mansions_reception

Marlborough Mansions_dining

Marlborough Mansions_garden

Marlborough Mansions_kitchen

In one of West Hampstead’s most prestigious mansion blocks, a delightful 3-bedroom apartment offering generous lateral accommodation of 1436 sq ft including an open plan kitchen/dining room ideal for entertaining together with a more formal reception room for relaxing. Presented in excellent internal decorative condition, the property has retained many original features and this, combined with high ceilings and wooden floors, provides an immediate overall feeling of a home full of charm and warmth.

This particular flat enjoys direct access to a well-manicured and cared for communal garden. Cannon Hill provides easy access to the shops, cafes and excellent transport links of West Hampstead whilst also being moments from JW3 and the O2 centre on Finchley Road. Early viewing of this fine home is advised.

3 bedrooms * en suite shower room * family bathroom * reception room * dining room * kitchen * communal garden * porterage * residents parking zone * energy rating D

West Hampstead Sales Office | 020 7644 9300
106 West End Lane London NW6 2LS | Email: ku.oc1506410211.r-b@1506410211selas1506410211
http://b-r.co.uk/property/details/300219789

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Is the property market bonkers?

‘Bonkers’. I hear the word repeatedly whenever discussing the West Hampstead property sales market with buyers, sellers and fellow agents alike. Even people with no recent first-hand experience tell me it’s bonkers.

Newspapers and websites tell us how bonkers it is. A headline in The Sun on Friday reads ‘Property up 2% in a month!’ and goes on to say that this is ‘fuelling fears a property bubble is looming’. Hardly a day goes by without The Daily Express fixating on the impending doom across its front page.

But how bonkers is it? Is it really a bad thing for London and Londoners? A recent article in the Guardian got me thinking; it tells how a central London property investment company has recently set up a £100m fund (or ‘warchest’ if you’re reading The Sun) to buy 1 and 2 bedroom apartments in prime central locations. The company’s reasoning is that the property price inflation seen over the last 40 years is set to continue at 9–10% per annum for the next 30 years at least. They say they can see no reason for this to change and it’s difficult to argue that they’re wrong: a growing population, strict planning laws, conservation areas, limited space and foreign demand and investment are unlikely to change. Their prediction – and gamble – is that by 2050 a central London flat will cost £36m.

This seems unimaginable and enormously unfair for many people, but made me realise that this is one of the reasons London is such a great city. The London property market creates huge wealth and prosperity due to the ‘multiplier’ effect of capital injection into services, employment and investment.

Much is made of overseas investors buying properties in London and never living in them but, in my experience, these people employ local surveyors, solicitors and agents when buying and then embark on expensive refurbishment programmes which employ local contractors and firms, increasing the value of the property and in some cases, gentrifying poorer neighbourhoods, setting new benchmark values for other properties in the process.

The London construction industry alone counts for 10% of the UK’s GDP and employs nearly 2 million people. Office development in London is now at a 4-year high with 9.7 million sq ft under construction and notable recent landmark sales including Google’s purchase of its new headquarters at Kings Cross. The knock-on effect of such investment is huge.

This wealth generation also helps create demand and employment opportunities that attract people from all over the world to London, adding to the multi-cultural mix of Londoners that want to buy property whilst giving it such vibrancy and diversification. This is what we all love about London – would we really want West Hampstead and West End Lane to feel any different?

Homeowners in London also benefit from the consistent rise in prices by being able to unlock large amounts of tax free equity in their homes which they can reinvest into businesses or help future generations get on the housing ladder.

Of course, those yet to get on the housing ladder, or who need to move to a bigger property, are finding it increasingly hard to make London their home as house price rises outpace wage inflation. The risk is that while London might become more diverse in some ways, in others communities like West Hampstead could become more homogenous as only the relatively affluent can afford to buy here, while everyone else is forced out of the city and onto those crammed commuter trains that run through our Thameslink station every day.

So, yes, it does all seem a bit bonkers, and perhaps inequitable for those that don’t live in London or are priced out, but the ripple effect of investment and increasing prices is felt across the whole of the UK eventually. It also makes London an incredibly vibrant, eclectic and exciting city.

Darryl Jenkins
Associate Director
Benham & Reeves
West Hampstead
020 7644 9300
Follow @BenhamReeves

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Property of the Month: March

This month’s property from Benham & Reeves is a three-bedroom maisonette.

Mill Lane, West Hampstead, NW6
£700,000
Joint agent

Mill Lane_kitchen

Mill Lane_balcony

Mill Lane_exterior

Mill Lane_reception

A beautifully refurbished 3 bedroom maisonette arranged over the top two floors of a period building located on Mill Lane, a popular road with easy access to the Jubilee Line at Kilburn and the cafes, shops and excellent transport links at West Hampstead.

3 bedrooms * en suite bathroom * shower room * family bathroom * reception room/open plan kitchen * separate WC * balcony

West Hampstead Sales Office | 020 7644 9300
106 West End Lane London NW6 2LS | Email: ku.oc1506410211.r-b@1506410211selas1506410211
http://b-r.co.uk/property/details/300220109

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Property of the Month: February

This month’s property from Benham & Reeves is a three-bedroom mews house with a south-facing terrace.

Rose Joan Mews, West Hampstead, NW6
£995,000
Sole agent

Rose Joan Mews_reception

Rose Joan Mews_kitchen

Rose Joan Mews_bedroom

Rose Joan Mews_terrace

A stunning three bedroom mews house located within a quiet private mews of only 10 houses close to the amenities of Fortune Green and West Hampstead. The bright and contemporary accommodation is arranged over two floors only and features a first floor open plan reception room with curved vaulted ceiling and a wall of glass maximising the abundance of natural light into the living areas, with direct access to a south facing terrace. Downstairs, good sized bedrooms lead on to a private courtyard and access to the mews.

There is a passenger lift up to the ground floor from the secure underground car park where this house benefits from two reserved parking spaces. Additional features include underfloor heating and comfort cooling throughout and a large individual storage room accessible via the car park.

3 bedrooms * en suite bathroom * shower room * reception room/open plan kitchen * underfloor heating * comfort cooling * patio * terrace * two reserved underground parking spaces

West Hampstead Sales Office | 020 7644 9300
106 West End Lane London NW6 2LS | Email: ku.oc1506410211.r-b@1506410211selas1506410211
http://b-r.co.uk/property/details/300219985

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patio

Property of the Month: January

This month’s property from Benham & Reeves is a two-bedroom raised ground-floor apartment in Goldhurst Terrace with a private patio.

Goldhurst Terrace, South Hampstead, NW6
£750,000

patio

Kitchen

reception

dining area

A superb 2-bedroom, 2-bathroom apartment arranged over the raised ground floor of a well maintained purpose built block located at the preferred end of Goldhurst Terrace, providing easy access to the transport links (Jubilee and Metropolitan Lines) and amenities of Finchley Road and Swiss Cottage.

The property is presented in excellent decorative condition and has direct access to its own private patio garden and also the added convenience of a secure underground parking space.

Early viewing of this particularly desirable property is advised.

2 bedrooms * bathrooms * shower room * reception room * kitchen * patio garden * secure underground parking * energy rating D

West Hampstead Sales Office | 020 7644 9300
106 West End Lane London NW6 2LS | Email: ku.oc1506410211.r-b@1506410211selas1506410211
http://b-r.co.uk/property/details/300219946

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Property market outlook: 9-12% rise over 2014

Thank you to West Hampstead Life for highlighting my market predictions for 2013 in January of last year. Thankfully, according to Rightmove, I wasn’t too embarrassed and figures for West Hampstead showed a year-on-year increase in prices of 7.5% against my prediction of 5% to 10%.

However, I suspect that this figure is quite conservative and, in my opinion, we have actually seen asking price rises of closer to 15% for some locations within West and South Hampstead.

This year saw us break the £1,000 per sq ft barrier for flats in South Hampstead with the sale of a garden flat in Aberdare Gardens in April. This sale seems to have set the benchmark for prices in these roads and asking prices for such properties seem to have risen relentlessly since. In fact, it is now commonplace to see £1,000 per sq ft being asked for apartments with no outside space or off street parking.

West Hampstead has seen similar increases although haven’t yet reached the dizzy heights of South Hampstead. Victorian terraced houses in the Greek and African Roads (Agamemnon, Achilles, Sumatra etc.) can now expect to achieve £1.4 to £1.5m (more with a loft conversion).

Of particular note this year was a house on Narcissus Road that had been developed to include a basement and loft conversion totalling 2700 sq ft which sold for £2.25m – to my knowledge, the only house in one of these roads to sell in excess of £2m. (More on basement conversions in a later issue). Flats in these roads are also now fetching approximately £750 per square ft (depending on condition and location).

On the other side of Fortune Green are the relatively new developments of the flats in Alfred Court and mews houses of Rose Joan mews. In 2013, we sold a 2 bed flat in Alfred Court in excess of £800 per sq ft and 2 mews houses at close to £1,000 per sq ft each in rose Joan Mews. This proves that the demand for new build and ‘maintenance free’ properties still commands a premium, even a few years after the build. This is also supported by the success of the Ballymore development at West Hampstead Square which is achieving in excess of £800 per sq ft for flats with no parking.

In my view, an area of interest for 2014 is that bounded by Sheriff Road, Kilburn High Road and West End lane. Last year saw a developed Victorian house on Gladys Road sell for just over £1.9m and an upper maisonette in good condition for just over £800,000. These roads show signs of building and renovation activity and seem to be undergoing a change in feel and occupation. They are also centrally located and of attractive Victorian housing stock.

In 2013, we also saw the development of renegotiating agreed sales upwards within a relatively short time of agreeing the sale. This awkward and uncomfortable process is a result of slow conveyancing caused by pedantic lenders and unmotivated solicitors combined with the rising market and press hysteria about London prices.

Ignoring the ethical argument, it’s difficult to disagree with vendors who could quite easily have remarketed a couple of months later and made themselves significantly more money. Especially, as the properties they wanted to move to are increasing in value in the same way.

An example from 2013 probably best sums up the market. We sold a townhouse in Parsifal Road which completed in May, one month after the initial offer was accepted. Two weeks after collecting the keys, the new owner had a change in personal circumstances and asked us to remarket the property. After only a few days of viewings we had agreed a sale at a price 8% higher than that agreed five or six weeks earlier. You can now see why I think 7.5% for the year is a bit mean!

The elephant in the room for 2014 is interest rates. All the other factors in terms of supply, economic recovery and foreign investors remain the same and I am expecting a strong start to the year with prices continuing to rise in our area. Most pundits are predicting rises in interest rates in 2015 but some are saying it will be towards the end of this year.

Almost certainly, the London and UK housing market will maintain its recovery and prices will continue to rise. The Governor of the Bank of England says he has measures in place to control the housing market but it will be interesting to see if any of them can slow the market without resorting to the traditional vehicle of interest rate rises.

My view is that history teaches us everything and that economics are cyclical. At some point, without further intervention in terms of planning and development (also for a later article), the London market will need to pause for breath, but that won’t be in 2014. I expect to see rises in values of between 9% and 12% in our area, with most of that growth coming in the first half of the year.

I would welcome your opinions and reaction to this. Also, it goes without saying, but if you would like a current valuation of your property please get in touch.

Happy New year.

Darryl Jenkins
Associate Director
Benham & Reeves
West Hampstead
020 7644 9300
Follow @BenhamReeves

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Property News: Could sale prices cool?

They weren’t forming long queues down West End Lane, but reports are that potential buyers were booked in every 15 minutes all day on Saturday and Sunday at the grand opening of Ballymore’s West Hampstead Square development. Many apartments had already been sold to ‘preferred’ clients before the launch, but it now seems that most have gone simply from the plans.

The rest of the West Hampstead and South Hampstead residential sales market has continued to reflect this voracious demand, which we see across the capital. More than 300 London estate agents recently reported buyer registrations up 50% year-on-year while new instructions are up only 17%. This makes a tight housing market even tighter, and pushes prices even higher.

Such has been the pace of this demand that I have recently found myself in the unusual situation of renegotiating prices upwards on sales that were only agreed two months previously. That’s a very high price for buyers to pay for delayed and slow conveyancing, and even more reason to make sure all your ducks are in a row and your lawyer on board when you make an offer.

As is becoming increasingly reported, most of the demand in London is being driven by overseas investors or wealthy UK-based individuals who are looking for somewhere to park their money. It’s odd to think of these buyers being prepared to spend such huge sums on property in areas they must surely often know little about. I can’t imagine many British people taking the same plunge in other foreign capitals. Nevertheless, their appetite seems insatiable and it’s happening in West Hampstead as much as anywhere. I actually sold a £3 million house to a Middle Eastern national who had never seen the property until the day he picked up the key!

Could there be a glimmer of hope for Londoners who live and work here? We’re starting to see signs of an oversupply in the lettings market, meaning that rental prices are falling in order to compete. Could a fall in yields and longer periods of empty properties deter investors, or cause them to capitalise their assets sooner? There is no doubt that sale prices will start to weaken if the rental market does suffer from over supply, as it is these investors who have kept prices high. This trend could become even more pronounced if significant numbers of renters take advantage of the Help to Buy scheme and therefore take themselves out of the rental market.

On a more personal note, I feel moved to set the record straight on what I see as the farce that is the Evening Standard’s ‘Diary of an Estate Agent’. I doubt this regular Wednesday column is top of most people’s must read list, but I get drawn to it every week. I guess it’s because I seek reassurance that my day-to-day experiences are mirrored by my competitors and thus that all is well in the world.

However, every week, some agent (normally from Knightsbridge) seems to have packed an entire lifetime’s events into five working days! Their witty anecdotes normally involve animals straight out of You’ve Been Framed videos, or swearing parrots that have reserved their hilarious commentary for the precise moment our agent steps through the door with his unsuspecting applicant. Fancy that. These viewings also seem to coincide (with astonishing regularity) with natural disasters, unruly children, leaks, non-English speaking tenants, Laurel and Hardy style building sites, buckets of water, uncontrollable bodily functions and general hilarity. Of course, it also always happens to be the week that the biggest deal in the history of the company was struck by the hero of the hour.

If only my weeks came anywhere close!

Darryl Jenkins
Associate Director
Benham & Reeves
West Hampstead
020 7644 9300
Follow @BenhamReeves

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Property of the Month: November

This month’s property from Benham & Reeves is a four-bedroom ground-floor apartment in Greencroft Gardens with a large conservatory and substantial garden.

Greencroft Gardens, South Hampstead, NW6
£1,650,000 Sole Agent

An exquisite and impressive 4 bedroom garden apartment forming part of a large period house on Greencroft Gardens. The property has unusually high ceilings which instantly provide a ‘wow’ factor when first viewing, especially the reception room which is nearly 30ft in length and opens on to a bright conservatory to the rear of the building. This, in turn, leads to a patio and a well stocked, lawned 60ft rear garden. There is also the added convenience of a private parking space (available on a long term rental agreement) and the transport links of either Finchley Road or West Hampstead are within easy reach.

4 bedrooms * 2 bathrooms (1 en-suite) * reception/dining room * study * conservatory * kitchen * garden * parking space for one car
Share of freehold

West Hampstead Sales Office | 020 7644 9300
106 West End Lane London NW6 2LS | Email: ku.oc1506410211.r-b@1506410211selas1506410211
http://www.b-r.co.uk/property/details/100123058

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Property of the Month: October

This month’s property from Benham & Reeves is a two bedroom apartment on West End Lane itself, with a private garden,

West End Lane, West Hampstead, NW6
£695,000 Sole Agent

A superb opportunity to acquire this beautifully presented, light and airy two bedroom apartment found in the heart of vibrant West Hampstead.

Presented in excellent decorative order with high ceilings, original cornicing and also boasting a westerly facing private garden, the property is just moments from the numerous cafes, boutiques and transport links of West End Lane.

2 bedrooms * bathroom * reception room * kitchen * garden * residents parking zone

West Hampstead Sales Office | 020 7644 9300
106 West End Lane London NW6 2LS | Email: ku.oc1506410211.r-b@1506410211selas1506410211
http://www.b-r.co.uk/property/details/300218008

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Property News: Could the bubble burst?

Finally, the quieter summer months are behind us and we can look forward to the autumn market.

Although we have agreed a good number of sales in the last couple of months, viewing numbers and new applicants have been down at normal summer levels, so there haven’t been many clues about what to expect next for the West Hampstead property sales market.

If we look at the column inches dedicated to the ‘house price boom’, it would seem there is only one way for house prices to go. This has been reenforced by Mark Carney, the new Governor of the Bank of England, who has pledged to keep interest rates low for the next three years, or until unemployment reaches an acceptable level. The government’s ‘help to buy’ scheme has also been a huge success.

On the other hand, some reports tell us that we are creating another bubble that is sure to burst. Historically, property markets tend to boom and bust; will this be any different? Are buyers confident of making a commitment now sensing further rises, or have price increases and the rising cost of living made properties in London unaffordable for many people? With several new instructions to bring to the market this week I will have a much clearer idea on buyer sentiment very soon.

According to economics text books, the London property market does not behave normally. In a free market, equilibrium is found through a price mechanism that reacts to changing demand and supply. This assumes that suppliers react to increasing demand by producing more goods or services. The reality of the West Hampstead property market is that there are very few new sites available to build on and those that are can take years to come to the market thanks to planning and local authority red tape, not to mention the time to design and construct. The result is that the market is largely made up of churn of existing stock, so, when demand rises, the only response is a rise in price.

This is obviously a very simplified overview but fundamentally explains why London prices continue to rise and will almost certainly carry on doing so over the next few months. There simply don’t seem to be any immediate factors that might alter the level of demand.

West Hampstead’s very own Mr Carney tells us that he has mechanisms available to cool the housing market other than interest rates, and it will be very interesting to see if he can indeed stabilise a market that is susceptible to ‘boom and bust’.

At a more local level, it seems that Ballymore is benefiting from this strong demand. Stories reach us that many of the units in West Hampstead Square are being sold to existing preferred customers ahead of the launch date. Could this mean they are rethinking pricing levels, which are already at approximately £850 per square ft? Maybe we will have scenes comparable with the Boxing Day sales to look forward to at the official launch!

Darryl Jenkins
Associate Director
Benham & Reeves
West Hampstead
020 7644 9300
Follow @BenhamReeves

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Property of the Month: September

This month’s property from Benham & Reeves is a three bedroom apartment over the top two floors of a Greencroft Gardens mansion block. It also has a roof terrace with views across the city. .

Greencroft Gardens, South Hampstead, NW6
£1,100,000 Sole Agent

A stylish three double bedroom apartment arranged over the top two floors of this exceptionally well maintained purpose built mansion block, located on one of South Hampstead’s sought after premier roads. The property boasts a master bedroom with en suite, off street parking and an unofficial roof terrace with spectacular views across the city. High ceilings and original features contribute to an overall impression of grandeur, volume and light. Greencroft Gardens is a highly regarded treelined road, perfectly located for the many amenities and numerous transport links of both West Hampstead and Finchley Road.

3 bedrooms * en-suite bathroom * shower room * reception/dining room * kitchen * unofficial roof terrace * private parking space * residents parking zone
Share of freehold

West Hampstead Sales Office | 020 7644 9300
106 West End Lane London NW6 2LS | Email: ku.oc1506410211.r-b@1506410211selas1506410211
http://www.b-r.co.uk/property/details/200226592

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Property of the Month: August

This month’s property from Benham & Reeves is a three bedroom split-level apartment on Agamemnon Road. There’s also the potential to create a large roof terrace.

Agamemnon Road, Fortune Green, NW6
£849,950 Sole Agent

A spacious three bedroom split level apartment with flexible accommodation arranged over the first and second floors of this charming period house in a quiet, sought after location amongst the ever popular ‘Greek’ roads. The property offers rooms of good proportions and natural light together with the potential of creating a large roof terrace (subject to the usual consents). Agamemnon Road is ideally placed just moments from the cafes, boutiques and transport links of West Hampstead and the recreational space at Fortune Green.

3 double bedrooms * 2 bathrooms * reception room * kitchen/breakfast room * residents parking zone
Share of freehold

West Hampstead Sales Office | 020 7644 9300
106 West End Lane London NW6 2LS | Email: ku.oc1506410211.r-b@1506410211selas1506410211
http://www.b-r.co.uk/property/details/300214108

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Property News: Could West Hampstead become a ghost town?

The West Hampstead property market has been mirroring the rest of London with demand continuing to outstrip supply in our low interest rate environment. Although we don’t seem (yet?) to have any “ghost streets” caused by the super-rich buying houses that they leave empty, the nature of buyers in our area has been changing over the past few months, with implications for prices and the future of home ownership.

Out of 7,000 new homes built in London last year, more than 5,000 were sold to overseas buyers. It seems that the capital growth from such properties is such that these homes can stand empty for most of the year and only used as a place to stay occasionally when in town. Kensington Palace Gardens now has an average property value of £36m and, closer to home, even Frognal Way in Hampstead comes in at £9.5m!

Aside from the impact on house prices, which doesn’t help buyers, councils have also highlighted this as a growing economic problem for the local community: unoccupied properties create no demand for local services or shops leaving empty run down looking local streets.

Since the spring, we’ve also seen the introduction of the ‘help to buy’ scheme. Mortgage lending has risen 21% nationally since May and, according to Rightmove.co.uk, asking prices across the country have continued to rise.

London still remains an anomaly though: prices in the capital have jumped by an average of £30,000 since the start of the year, and are now 7% higher than they were before the financial crisis. In the rest of the UK, prices remain 9% down on 2007 levels.

What about West Hampstead? In terms of activity, we’re seeing new applicant levels on a par with last year, and instruction levels are similar although down slightly since the first quarter.

We have noticed a change in the mix of the type of buyer, however, especially the re-emergence of buy-to-let investors. Rental prices in London have risen 7.2% year-on-year, significantly outstripping inflation and interest rates. West Hampstead has always been attractive for these investors due to our transport links and type of housing stock, but these price increases combined with the demand from those who are finding it hard to get on the housing ladder means very healthy returns and strong capital growth. In fact, three of the last five sales we have agreed were to buy-to-let investors.

It is also noticeable that a large number of our vendors are moving out of London rather than staying locally. Rising prices and stamp duty make it impossible for many people to afford to trade up locally when faced with starting a family. We’re also seeing retirees cash in and enjoy the proceeds in a similar, cheaper property out of town or a second home abroad. Some estate agents in the Home Counties have reported a 20% increase in London applicants looking to move out. Is London becoming the new Manhattan?

The other trend we’ve seen is that buyers are becoming more price sensitive. Earlier in the year, buyers were more prepared to ‘pay what it took’ to secure a property. Buy-to-let investors are ruled by the head not the heart, of course, so if the deal doesn’t stack up they won’t proceed.

For the ordinary buyer, salaries are struggling to keep pace with house price growth and what may have been affordable three months ago is now out of reach. Naturally, vendors want to sell for more than their neighbour did and are also constantly consuming the price rise headlines. Throw in estate agents who are desperate to secure instructions in a highly competitive market with limited stock and it’s easy to see why asking prices are continually rising. Nevertheless, we have recently found that viewing numbers on overpriced properties are now very low whereas at the beginning of the year and last year buyers would still take a look. Dare I say it, could things be starting to cool down?

Overall, if you are thinking of selling there is strong demand locally if your property is priced sensibly. If you find that viewings are thin on the ground, then it’s almost certain that your asking price is too high. Don’t forget that estate agents only earn a fee if they sell your property. so they have all the motivation they need to bring buyers through the door.

Darryl Jenkins
Associate Director
Benham & Reeves
West Hampstead
020 7644 9300
Follow @BenhamReeves

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Property of the Month: July

This month’s property from Benham & Reeves is a two-bed on Priory Road, with scope to create a lightwell and bring natural light into the basement.

Priory Road, South Hampstead, NW6
£625,000 Sole Agent

In one of the premier roads in the South Hampstead Conservation Area, a most unusual and attractive ground and lower ground floor apartment. The flat offers character packed accommodation with direct access to an extensive west facing rear garden. The excellent transport, restaurant and shopping facilities of West End Lane are a few minutes walk away.

2 Bedrooms * Bathroom * Shower Room/Sauna * Reception Room * Kitchen * TV Room * Utility Room * Guest Cloakroom * West Facing Communal Garden

West Hampstead Sales Office | 020 7644 9300
106 West End Lane London NW6 2LS | Email: ku.oc1506410211.r-b@1506410211selas1506410211
http://www.b-r.co.uk/property/details/300214108

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Property of the Month: June

Welcome to a new sponsored feature of West Hampstead Life. Each month, Benham & Reeves will  showcase a property for sale in the West Hampstead area. This month it’s a Broadhurst Gardens two-floor three-bedroom maisonette with access to the communal meadow behind the block.

Broadhurst Gardens, South Hampstead, NW6
£1,275,000 Sole Agent

A beautifully presented three bedroom upper maisonette arranged over the top two floors of a charming period home on one of South Hampstead’s premier roads. The apartment offers stylish and flexible living space, high ceilings throughout and a wonderful reception room with spectacular views of the communal meadow below. The property is perfectly located for the numerous cafes, boutiques and transport links of both Finchley Road and West Hampstead.

3 Bedrooms * En Suite Shower Room * Family Bathroom * Reception Room * Kitchen * Balcony * Communal Meadow * Residents Parking Zone

West Hampstead Sales Office | 020 7644 9300
106 West End Lane London NW6 2LS | Email: ku.oc1506410211.r-b@1506410211selas1506410211
http://www.b-r.co.uk/property/details/300218651

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Property News: Has West Hampstead just got more acccessible?

This month sees the introduction of various welfare and tax changes and we’ve already had the announcement in March of further government initiatives to get the housing market moving, but what will this all mean for the West Hampstead market?

The background to these initiatives has been covered in previous articles, but in a nutshell banks are reluctant to lend to buyers as they are striving to improve their balance sheets and are reluctant to over expose themselves to the housing market with risky high loan-to-value ratios. This means that first time buyers are having to find at least 20% deposits and some existing owners do not have enough equity in their homes to meet the new lending criteria and therefore can’t move up the ladder, even though they can afford the repayments due to the low interest rates.

This situation has led to a dramatic slowdown in the number of transactions. Recent government figures show that the number of annual house sales has fallen by 50% since 2007 and that, on average, a house sells once every 25 years up from once every 15 years as recently as 2007. The implications of this slowdown on the economy and on all the related industry and services are enormous and clearly something has to be done to get things moving.

Last month we looked at the relaxation of planning laws as a way to stimulate building work. Rather than invest in infrastructure regeneration, this government has focused on other methods both of which should boost the West Hampstead property market.

First, from Jan 2014, the ‘Help to buy’ mortgage guarantee will enable buyers of new and existing property to borrow with only a 5% deposit. As long as the buyer is creditworthy and judged able to make the payment, the lender has the option of purchasing a government guarantee that will compensate them for a portion of its losses in the event of foreclosure. This is available for purchases up to £600,000 with a maximum guarantee of £120,000 (15%).

This is very good news for the NW6 market; a significant part of the property for sale in our area is valued between £350,000 and £600,000, so given the attraction of owning versus renting, this access to mortgages with a 5% deposit should be hugely beneficial. It will also make it easier for owners of first-time buyer properties to take the next step on the rung to owning a 2- to 3- bed property and improve supply all round.

The second part of the scheme is for new build properties only. This provides a loan directly from the government of up to 15% of the property value (capped at £500,000). There will be no charge for this loan in the first five years, then in the sixth year a 1.75% annual charge is levied. This will be adjusted in line with the RPI every year (~+1%). Again, for the lower end of the West Hampstead market this can only be good news. Most new build developments in the area have starting prices of around £400,000.

The criticism levelled at these schemes is that they will create another housing bubble. Artificially creating demand could lead to unsustainable over-priced housing and put us exactly where we were when the bubble burst in 2007. The government has said that these schemes will be available for only three years, so the impact should be limited in the long run but give the market a much needed kick start by providing access to home ownership that has been denied to many Londoners in the short run. Given all the failed attempts to get banks to lend again at least something different is being done to help.

At the upper end of the market, the scrapping of the 50p tax rate for high earners came into effect on April 1st, and this too should hopefully stimulate demand among those with higher levels of disposable income.

As usual, please let me know your thoughts. Has one of these schemes meant that you can now make the move you were hoping for? What else could be done to stimulate transactions?

Darryl Jenkins
Associate Director
Benham & Reeves
West Hampstead
020 7644 9300
Follow @BenhamReeves

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Property News: Planning for disaster?

The first days of spring seem to have come and gone, but we are now looking forward to what are traditionally the three best months for residential sales. However, while prices are on the up locally, the government’s attempts to stimulate the construction industry may not be enough to dampen demand and risk blighting our neighbourhoods.

As previously reported, the property market in West Hampstead has started buoyantly this year. With buyer numbers up and slightly more property coming to the market, we have shown a 50% year-on-year increase in the number of sales agreed for January and February. I know other local agents are reporting similar stories.

The latest data from property analyst Hometrack indicates that national house prices rose by 0.1% in February. This is the first time since May 2012 that rises have been reported for nine consecutive months. The report also indicates that the north/south divide is growing further: Fewer than 1 in 7 postcodes across all of England and Wales reported an increase, but when you look just at London, that jumps to almost 1 in 2 (meaning they account for three-quarters of those national rises). This indicates that although there are some signs of recovery for the national market, London is still powering ahead.

The reasons for this demand have been well documented by the press and in this column. The government is hoping to capitalise on this demand and get the economy growing by stimulating the private construction industry (worth 6% of GDP and almost £100 billion), which is forecast to decline by 2% in 2013 following a 6.3% drop in 2012. This fall is largely due to a 14% reduction in government spending on infrastructure and construction projects.

The biggest concern is that only 118,000 new homes are expected to be built in 2013. I realise it may seem as if the majority of these are coming to sites around West End Lane; the reality is that this total is predicted to be only half the actual demand. The government has identified planning red tape as the issue and is temporarily relaxing planning laws in an attempt to generate more building. However, the Local Government Association, which represents local councils, says that there are currently 400,000 sites across the UK that have planning permission to build and that roughly half of all applications are eventually granted.

Of course, what it really comes down to is money – profit and availability. Developers are only interested in sites that return a profit, while more often than not local councils’ insistence on provision of affordable housing (or payments under section 106 agreements) in new developments often make these sites unprofitable. Meanwhile, former industrial or landfill sites require expensive cleaning operations and are normally in lower cost and less desirable areas. Developers want prime sites on which to build prime properties. It’s no wonder that house builders are sitting on large land banks in greenbelt areas just waiting for the value to shoot up when permission is granted. In addition, the financial crisis has led to less available funding for building, more financial penalties for missed repayments, and banks requiring more collateral. 

At a micro level, the government is trying to kick-start the construction industry by enticing us to build more extensions and conservatories through this three-year period of relaxed local planning laws. Now, you no longer need planning permission to build loft conversions or single rear extensions that are less than 6m or 8m from the back of your house (whether a semi or detached). Again, this assumes that funds are readily available to complete these building projects. Neighbours still have the right to complain and halt construction and any flat still requires planning permission for any building. I fear this policy will lead us towards half-finished, half-baked and ill conceived designs that will be refused retrospective consent when this temporary period finishes.

There is clearly a significant social and economic issue regarding available housing and accommodation in London and the UK, but planning procedures and consultations exist to protect individual homeowners from ‘blot on the landscape’ developments and over ambitious neighbours. Relaxing these laws is unlikely to lead to economic stimulus or benefit local neighbourhoods. Perhaps, in true Keynesian fashion, the government could consider increasing its spending on larger-scale house building projects to give the industry and economy the kick-start it needs?

In the meantime, a lack of available property and new-build investment, together with an insatiable demand continue to drive house prices upwards in South and West Hampstead.

Do let me know what you think? Are you planning to take advantage of the looser regulations on extending properties? Are you happy to watch your house price rise through undersupply in the market more generally?

Darryl Jenkins
Associate Director
Benham & Reeves
West Hampstead
020 7644 9300
Follow @BenhamReeves

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Property News: Why sellers tolerate fees

The start to the year has been very encouraging for the sales market in West Hampstead. It seems that the government Funding for Lending scheme, introduced six months ago, is starting to have an impact on the availability of loans while overall rates for borrowing are now at their lowest levels since the start of the recession.

It is hard to quantify exactly how much of an effect the scheme is having but there is no doubt that new applicant and viewing levels are up significantly from January 2012, and there’s an increased level of confidence in the market from agents and sellers alike.

Further good news for buyers is the government’s announcement that later this year it intends to allow empty office buildings to be converted into residential homes without the need for planning permission. This should relieve some of the upward pressure on sales and rental prices and is estimated to create an extra 100,000 homes across the UK.

This month I also wanted to raise the thorny subject of estate agents’ fees. According to the Guardian and Halifax Building Society, between 1959 and 2009 house prices have risen by 273% while real earnings rose 169%. Estate agent fees have not changed much in percentage terms over that time, so it would seem we are therefore earning more in real terms for the same job.

Is this what causes the ill feeling about estate agents? After all, in London we are talking about £40,000 (ex. vat) for selling a £2m property or even £10,000 (ex. vat) for selling a £500,000 flat (the price of an average 2-bed in NW6). On the face of it, not great value. Throw in the fact that ours is a largely unqualified profession governed by a mainly toothless Ombudsman scheme (although there are signs that it’s finding its bite) and even we can see why some of that negative sentiment arises. Fees for your estate agent far outstrip those for your conveyancing lawyer or RICS qualified surveyor. Hardly seems fair?

However, I suggest that there is a love/hate relationship between seller and agent and that although our fees seem high we can justify this and that secretly, sellers don’t really mind paying them.

This thought came to me while reading about Tesco’s failed venture into estate agency. Like many others, it invested into an online-only estate agency. The premise was that sellers, fed up with high fees, could advertise their properties online, take enquiries, conduct viewings and negotiate a sale all for a few hundred pounds. Other companies have tried various different versions of this model; some offering a negotiation and sales progression service and others a lower fixed percentage. None have yet succeeded.

It intrigued me that although sellers complain about estate agent fees when they were given the opportunity to pay less, they didn’t take it. I conducted some very basic market research: I emailed 25 of my friends and family and asked them to rank in preference what makes them decide who to appoint to sell their house: a) fees. b) local reputation c) recommendation d) personality/liked the agent or e) sold in my road.

Only one person replied that fees were the most important factor, and most placed it at the bottom of the list. It would seem that there is value in local knowledge and a track record, and that sellers do put trust in their agent to do the best job for them. I would argue this is because agents invest thousands in up front costs, creating a market place where property can be sold for the best possible price.

High street premises, newspaper advertising, expensive websites, numerous property search sites (whose prices go up exponentially each year), staff, sponsorship, marketing, petrol, cars etc.. are all up front costs designed to attract buyers for your property. This demand creates a market where you will be assured of achieving the market value of your property.

Another aspect of estate agents is that they have played a significant part (rightly or wrongly) in pushing up property prices over the last 50 years. Competition amongst agents and sellers’ desire to get the most money they can for their property means that every new instruction comes to the market at a slightly higher price than the last. This has contributed to huge amounts of personal wealth being made through the property boom of the last 50 years. Is part of the reason we accept the fees because the money we make is almost like Monopoly money that we have not seen and wouldn’t have made otherwise.

Property is usually a family’s single biggest asset and, naturally, when selling you want to be absolutely sure that you will be getting the best possible price. It seems that when it comes down to it, sellers do consider the agents the experts.

I would be interested to hear your views on this. Next month, we’ll look at the importance of development and consider whether homeowners and local authorities have too many rights to prevent it.

Darryl Jenkins
Associate Director
Benham & Reeves
West Hampstead
020 7644 9300
Follow @BenhamReeves

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Property News – What will 2013 bring?

As homeowners and buyers we all have an opinion on what property is worth in our area. Indeed, many people have made a fortune by speculating or even just by staying put while prices have risen.

In previous decades this was a hot topic of dinner conversation, but since the advent of the internet, property prices have become very transparent. You can now find your address on zoopla.com, fill in a few details and be told in an instant what your house or flat is worth.

What is now more difficult to predict is what might happen next. Lets take a look at the factors affecting house prices and demand in West Hampstead for the next 12 months and I’ll give you my best guess on where we could be at the end of this year.

Successive governments have promised the end of ‘boom and bust’, but none have been able to deliver. House prices have ebbed and flowed with the economy, gone pop when the bubble has burst, and then recovered to start the whole pattern again. But, as a nation fixated on home ownership, we have all willed prices ever upwards and this longer-term trend has almost become predictably reassuring. After all, despite the ups and downs, London prices doubled every five years up to 2007.

This time, however, I think things are a bit different. There is now a huge difference between London and the rest of the country. Legal and General predicts that the UK market has now hit bottom but prices will not start to recover until 2017. Prices in London, meanwhile, have already far outstripped their 2007 peak and in some prime areas they are already 50% higher! The difference is that this price increase is being fuelled by the high demand for the relatively few available properties – transaction levels remain half of what they were in 2007.

West Hampstead sellers must face the decision of whether to hold out for another 12 months in a rising market, or whether to sell and pre-empt the possible bursting of the bubble. Buyers of course are hesitant to commit at prices that might tumble, but are more anxious about not eventually paying more for the same property if they wait, especially if they have to move. Lenders are cautious for the same reasons and require more security and certainty. These factors, together with overseas buyers looking for a safe haven for their cash, have all driven the increase in London house prices since 2010.

The big question is how long can London prices keep going up? The answer seems to be for quite a while longer. There is no indication that the factors affecting prices will change in 2013. Supply will remain low and demand high. Recent news regarding increased lending at lower rates will create more room in the market for price rises, and the levels of investment in new-build housing remain at record lows. The only threats to further price rises would seem to be a sudden interest rate rise or the impact from another global economic shock.

In their recent forecasts, Knight Frank, Hamptons and Savills all predict a levelling off of prices in London with small rises of between 1% and 2% in 2013. This seems cautious to me (they said 2–5% last year) so I shall stick my neck out and say we should expect to see rises of between 5% and 10% in West Hampstead in 2013. The basic economics of supply and demand is my reasoning.

Thanks for all your comments and feedback from last month, please keep them coming. Next time, I’ll look at how estate agents work and raise the sometimes controversial issue of fees!

In the meantime, I wish you all a happy and prosperous 2013.

Darryl Jenkins
Associate Director
Benham & Reeves
West Hampstead
020 7644 9300
Follow @BenhamReeves

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Property News – Stressed in NW6

Welcome to the Property News section of West Hampstead Life. Local estate agent Benham & Reeves will be writing about the local sales market over the coming months, giving you some sales and prices statistics for the area as well as encouraging debate around estate agent practices, development and other areas of the property sales market in West Hampstead (comments will be moderated).

Even though these articles are being written by an estate agent, I’m making sure it’s honest comment and criticism of the industry! Here’s what Darryl Jenkins, manager of Benham & Reeves’ West Hampstead office, says about the venture:

The concept has been developed in conjunction with West Hampstead Life as a way of encouraging a dialogue between local residents and mistrusted estate agents. Hopefully, it’s refreshingly different with some (though perhaps not all) stereotypes being broken along the way.

So, with that, let me hand over to Darryl for December’s Property Sales News

Stressed in NW6

The start of this venture marks the end of another challenging year of property sales in West Hampstead. Challenging for buyers, sellers and agents alike.

Buyers have faced ever-stricter lending criteria for mortgages and only the very best candidates with at least 20% deposits are being accepted. There are signs that this is starting to ease though. According to recent figures published by the Council of Mortgage Lenders (CML), the number of first-time buyers taking out a mortgage to buy a property in London between July and September was the highest for three years, although still far short of 2006/07 levels. Ownership in London remains, at 50%, the lowest in the UK.

In the West Hampstead office we have seen about the same number of new buyers registering in 2012 as in 2011 with an increase over the last few months mirroring the CML data. There are also signs that mortgage deals have become more competitive with private banks entering the market – some of whom are offering 1.99% fixed for 2 years with a 30% deposit.

Fewer offers, and offers below asking price also indicate a lack of confidence in the continued rise in prices and a reluctance to meet sellers’ price expectations, which are being buoyed by the lack of property on the market and the constant message from estate agent marketing that demand is strong.

Naturally, buyers want to buy at the lowest price and sellers want to sell at the highest price but I cannot remember a time when there have been such conflicting messages. Every day, the press highlight the challenging national and international economic situation, yet households are also receiving a constant stream of ‘record price achieved, more property required’ leaflets through their doors.

For example, we recently marketed a garden flat in West Hampstead at the vendor’s asking price of £1.5m, which 12 months ago would have been valued at £1.3m. After 30 or so viewings, we had received several offers all around £1.35m. The owner was reluctant to agree a sale at this level as he really believed the value to be a lot higher even though the market had found the level lower. After months of more viewings we have eventually agreed a sale just below £1.4m. This demonstrates the widening gap between vendor and buyer expectations. Both want to build in more of a financial cushion against the uncertainty of the market.

The next hurdle for buyers has been finding a suitable property to buy. Prices in West Hampstead are up roughly 10% this year so we’re seeing that sellers are more likely to hold onto their property in this rising market rather than sell. This is compounded by the fact that sellers are usually also buyers who have been put off by the new stamp duty increases and the general economic uncertainty of job security.

Apart from the difficulty of finding your next home, owners of property in West Hampstead have enjoyed good capital appreciation in the last 12 months. If a property has come to market at a sensible price we have found a buyer within a couple of weeks at what is normally a record price for the road or block. The difference is that the buyer is more likely to be an overseas investor than a local owner or renter trading up or buying for the first time.

This market also brings new challenges for estate agents. A recent count on Primelocation.com showed 106 separate agents advertising property for sale in NW6! Whilst I don’t expect too much sympathy (years of raking it in etc..etc..) every agent is having to work twice as hard just to stand still. Fewer properties on the market and even more agents trying to sell them has inevitably put downward pressure on fees (to be covered in a future article). This is good news for sellers but also explains why you’re getting more marketing material through your door as we all fight for our share.

This unique market, where lenders are reluctant to lend, sellers are thin on the ground, prices are rising and transactions are down has bought new levels of anxiety and stress for all. Agents have indicated record levels for the percentage of agreed sales that have fallen through this year – normally we’d expect 1 in 3, but this year it’s more likely to be 1 in 2. Lenders are taking twice as long (in some cases up to three months) to approve mortgages and surveyors and lawyers are taking longer and being beyond thorough (there’s always more litigation in economic slumps) All this means that estate agents are becoming more skilled at counselling than valuing! Holding a transaction together is now harder than any of the other sales processes, so when choosing an agent consider their life experience and people skills as well as their expensive marketing.

All in all, whether you have been a buyer, seller or agent in 2012 you are probably feeling more than 12 months older than you did in January. It’s been a stressful year.

What will happen in 2013 and beyond is clearly tricky to predict, but that won’t stop me having a go next month!. Please let me know your thoughts on the year ahead or any other comments about either the macro or micro issues of the property market.

Darryl Jenkins
Associate Director
Benham & Reeves
West Hampstead
020 7644 9300
Follow @BenhamReeves

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