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Bringing West Hampstead insight to national property statistics

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Every week newspaper headlines vary between ‘house prices rise’ or ‘house prices fall’ – but which headline is accurate?

We thought we’d delve behind the headlines for this month’s West Hampstead Life column; we’ll be sharing some interesting stats and sprinkling them with some local insight to bring them to life.

First-time buyers
Nationally, the number of first-time buyers is down compared to 20 years ago, and according to the English Housing Survey, the average age of first-time buyers now stands at 33 years old. However, although there is no question that the average age of first-time buyers has steadily increased over the years with a direct correlation to property price inflation, the reality is more nuanced. That’s because the age at which someone buys for the first time is dependent on their personal circumstances.

For example, we receive many enquiries from first-time buyers who are getting considerable support from their parents. In these instances, parents either have cash or equity they can release from the family home, therefore bridging the affordability gap for their children who only need to take out a mortgage for an amount that’s affordable to them.

First-time buyers in this scenario typically live at home and are in the early stages of their first job after completing a degree. This gives an average first-time buyer age of around mid- to late-20s, a stark contrast to the majority of first-time buyers whose parents can’t raise such a large amount of ‘spare’ cash – and therefore spend years saving for a deposit whilst renting. For this self-sufficient majority, the average age is early- to mid-30s.

Private rented sector
Nationally, 4.5 million households rent in the private sector, and that figure is likely to grow (with many developers now choosing to build specifically to rent rather than sell). On average the weekly rent in London is £309, but in West Hampstead it’s around the £430 mark. Despite it costing more than average to live in West Hampstead, we’ve found that local tenants pay less in rent as a percentage of their income, compared to the wider London market.

In general, the number of families living in the private rented sector has grown significantly over the last decade. Although we haven’t seen this too much in West Hampstead, there has been an increase in young families with children under four renting in the area.

Neighbourhood
According to the English Housing Survey, 88% of Londoners are ‘satisfied’ with their neighbourhood. We’re sure most West Hampstead Life readers are more than ‘satisfied’ with their neighbourhood and reckon we’d score higher than average!

What’s interesting is that the London data shows a slight discrepancy in levels of happiness between those that rent and those that own their own home – but in our experience, this isn’t the case for West Hampstead. We’ve found that renters rarely leave the area and do so only if they want a complete change in lifestyle.

Local update
Stats aside, it’s been a slow start to the year. However, the change in the weather has helped both the sales and lettings markets; throughout March we’ve been contacted by vendors seeking pricing advice as well as tenants looking to move and settle before summer begins.

On the sales side, there’s a healthy demand from buyers looking for a first or a better home in and around West Hampstead. What’s noticeable though is how discerning buyers are being, and they’re certainly less prepared to compromise than they’ve been in the past.

On the lettings side, we’ve noticed a lot of applicants moving from Hampstead and Belsize Park to West Hampstead. These tenants tend to be professional couples looking for extra value for money who now perceive West Hampstead at nearly the same level as Hampstead and Belsize Park. Naturally, we agree, and there’s no doubt that the significant improvements to transport infrastructure and amenities along West End Lane have helped shine a light on the area.

To get accurate market advice for your property, please do get in touch to arrange your personal market appraisal or pop in to see us at our West End Lane Office, on the edge of West Hampstead Square.

Jonny Miller and Matthew Spencer

T: 020 7481 2907
E: oc.dn1529709366asnho1529709366j@dae1529709366tspma1529709366htsew1529709366
W: www.johnsand.co
JOHNS&CO, Unit 7, Hardy Building, West End Lane, London, NW6 2BR

Property News: Rental Standard gives tenants confidence

Boris Johnson has recently launched London’s first rental standard, a ‘city-wide badge of accreditation’, to help Londoners rent with confidence and ensure landlords are complying with the law.

We’ve known for a long time that tenants in London want to rent property through an accredited Lettings agency (in our 2014 tenant survey 80% of respondents said they would rent only through an accredited agency) but with several industry bodies in operation there’s a need for a unified body.

The London Rental Standard will automatically allow members of the Association of Residential Letting Agents (ARLA), National Approved Lettings Scheme (NALS), Royal Institution of Chartered Surveyors (RICS) and UK Association of Letting Agents (UKALA) to receive their badge. By bringing together several landlord accreditation schemes, one badge will be awarded to all letting agents and landlords who meet the London Rental Standards, making it easier for tenants to identify transparent agents.

We often hear that London is a market in itself and this is true for lettings as well as sales. Currently more than 25% of London’s households live in rented properties, and that’s expected to increase to 40% over the next ten years. With that in mind, anything that makes renting in the capital safer has to be a step in the right direction.

By signing up to the London Rental Standard, lettings agents and landlords will agree to meet some ‘significant core commitments’, including transparent fees, better property conditions, better communication between landlords and tenants, improved response times for repairs and maintenance, and protected deposits.

In numbers
40% – expected London households living in rented homes by the mid-2020s
85% – landlords unaware of the core legislation that protects renters
61% – landlords with no professional management training
100,000 – target of London Rental Standard accredited letting agents and landlord by 2016

I think the London Rental Standard can only be seen as a real positive, and it’s a step towards regulating the entire lettings market. However there are a few unanswered questions that I’d like to see addressed, including what will happen to agencies that don’t comply. I’m also conscious that the London Rental Standard needs to raise awareness by continually pushing it in the press, so more consumers are aware of what they are doing.

Paramount is celebrating 25 years in West Hampstead this week, so I’ve been thinking a lot about the state of the lettings market when I joined the company in 1998. Back then there were no deposit schemes or EPCs, and rules and regulations weren’t the same as they are now. Lettings has come a long way and smartened its act up, and perhaps in a few years time a London Rental Standard accreditation will be as mandatory as a Gas Safety Certificate.

Spencer Lawrence
Lettings Director
Paramount Properties
150 West End Lane
West Hampstead
020 7644 2314

request a lettings valuation

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Property News: Coping with longer tenancies

It’s been a busy first quarter for Paramount as we’ve made some major changes to how we manage properties. As the length of the average tenancy increases and the private rented sector becomes a long-term housing solution, we have to adapt to ensure procedures such as inventories continue to be fair.

In order to combat the lack of knowledge about a property that the shift towards longer tenancies presents, we need to take a proactive and preventative approach to property management. It’s the only way we can protect a landlord’s asset over a long tenancy. We now offer landlords a regular audit of their property during the course of any tenancy which will allow us to spot minor problems before they escalate, such as old water stains from previous leaks or deteriorating wooden windows, ensuring minor issues are identified and fixed long before they become an issue for tenants or landlords.

We will be enlisting an independent inventory company to provide this service at a cost to Paramount. Inventory clerks are trained, property-savvy professionals who are able to spot small issues before they become big problems. By using an independent, impartial and professional inventory company instead of our in-house management team, landlords will know that all listed works will be recommended. In keeping with our ethos, the inventory company we will be using are an independent family owned business who we have worked with for many years.

As tenancies get longer there is no doubt that letting agencies need to adapt it order to meet the challenges this change presents. It’s a topic we think a lot about and we will continue to find innovative ways to improve our service inline with these changes.

Agents Giving

We are thrilled to have been named Fundraising Champions for the second year running by ‘Agents Giving’, a charity that encourages and supports agents to raise funds for established and recognised charities in the UK.

We all become blinkered sometimes to what is going on outside of our own world. I believe that it is important to help people first hand in order to see what’s going on inside our local community as well as donating and fundraising for charities like Agents Giving. We’re proud to have been named Fundraising Champions for the second consecutive year, but the real reward is seeing first hand how charities like Ashford Place and Thames Reach improve the lives of others.

Talking of charity leads us nicely onto…

Brent Foodbank
Brent Foodbank, located between Kilburn and Willesden Green, urgently need supplies to donate to those in need in our community. Paramount is working with Brent Foodbank as a donation drop-off point; this means you can donate any non-perishable food items and toiletries six days a week at our office, 150 West End Lane, which we will then deliver to the centre.

Each week we’ll let you know on Twitter and Facebook what the Foodbank needs the most. This week toiletries are in high demand, so if you’re able to donate shower gel, toilet roll, soap, toothbrushes or shampoo please drop them into our office.

Spencer Lawrence
Lettings Director
Paramount Properties
150 West End Lane
West Hampstead
020 7644 2314

request a lettings valuation

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Property News: Camden rent rises trail London average

The rental market in January has been very mixed. There are lots of deals being done at the entry level, with cheaper flats being snapped up fast,but at the top end asking prices are being clipped.

Demand for properties has been strong in January but we are also seeing more properties coming onto the market, which might start to balance supply and demand. We know from experience that applicants will come if you have the right properties, and an increase in supply leads to a higher volume of applicant enquiries. We are getting plenty of enquiries from potential landlords and we’re valuing several new properties each day.

In an area like West Hampstead there are lots of excellent applicants out there but, as we started to see towards the end of 2013, tenants are looking for value for money. The rental demographic has shifted and high calibre applicants are looking to rent for the long term. Their wants and needs have changed and this leads into what we discussed in our last property news; that landlords need to invest in the product if they want to attract and maintain quality tenants.

Looking to the future

Encouraging landlords to invest in their product is a start, but in order for this to be a success for both tenants and landlords they need to fit the right demographic to the product. Last year we ran a series of polls through our West Hampstead Life articles, and your feedback prompted us to ask more questions in order to understand what people want when renting a property.

We’re currently running a short survey to understand what people want when they rent a property. If you are currently renting or are looking to rent in the future, please take three minutes to complete the survey. You’ll get the chance to leave your email address at the end to win £250 John Lewis vouchers, and we’ll share the data in our May Property News blog for West Hampstead Life.

Take the survey here.

Housing stock in London

This week on Twitter the issue of local housing stock was raised. In light of this I was interested to read a recent Centre for Cities outlook that looked at housing stock and prices together to provide a useful insight into a city’s housing market.

London features within the top 10 cities with the highest housing stock growth, coming in at 9th place. Additionally among the top-placed cities, only five (Swindon, Milton Keynes, Gloucester, London, Peterborough) have experienced housing supply growth in accordance to their population growth rate.

Average private rent levels in Camden

In December 2013, rent in London increased by 1.6% compared with the same month a year before, compared to an increase in the rest of England of 0.7%. Although the London property market flourishes in comparison to the rest of the UK, rents across London boroughs vary dramatically. I thought it would be interesting to break the average private rent levels down further and compare average private rent prices increases in Camden compared to London as a whole and the neighbouring boroughs of Brent and Islington.

private rents

Between 2012 and 2013 private rents in London increased by 13.04%. In comparison private rents in Camden over the same time period increased by 1.29%, far behind the London average.

Private rent increases in the neighbouring boroughs of Brent and Islington were higher than Camden over the same time period, seeing increases of 3.68% and 7.44% respectively.

Rents aren’t rising as fast as they once were because rental yields in London are almost insignificant compared to capital appreciation. Previously landlords wanted an investment vehicle that guaranteed them at least a 5% yield, but capital appreciation provides more value than any yield.

The importance of a good team

Towards the end of last year I started to think about what the New Year could throw at us, and I quickly found out. In December I underwent major back surgery following three very uncomfortable months. Thankfully I had time to prepare the lettings team to ensure everything ran smoothly in my absence, but in the first week of January our ever popular negotiator Dominic Moyes broke his ankle and is still unable to work. It’s been a big challenge not having him around but it’s shown me the importance of having a good team around you.

Having two senior members of staff recovering isn’t ideal for any business, but last year we worked hard to build an exceptional team and the internal restructure that took place meant the business was capable of dealing with this unfortunate ripple. Ten members of the lettings team are individually ARLA qualified and most have experience in different areas of the business. Having knowledgeable and experienced staff able to step up successfully into different roles has been fantastic to watch and I’m excited for the year ahead!

Don’t forget to enter our #WhampPlanet competition! Collect your free West Hampstead bag from Paramount, tweet a picture of it on your holidays to @west_hampstead and you could win vouchers and prizes from West End Lane Books. West Hampstead bags have already made an appearance in Antarctica, Argentina and New York – where will it end up next?!

Spencer Lawrence
Lettings Director
Paramount Properties
150 West End Lane
West Hampstead
020 7644 2314

request a lettings valuation

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Special agents: Licence to rent

Would you rent a property through an unlicensed agent?


Place your vote and we’ll update you on the results on Twitter next week.

Paramount is passionate about compulsory licensing for letting agents. Residential lettings is an unregulated industry and we believe that all agencies and lettings negotiators should become licensed members of a regulatory board in order to let property.

Licensing is imperative to giving consumers real confidence when dealing with agencies and individual staff members who are regulated by common codes of practice. Many agents invest significant time and money to ensure all these requirements are met but are still tarnished by unregulated agents who continue to stoke the public’s negative image of agency.

Becoming a licensed agency is good for generating new business too. More than two-thirds of landlords who use a lettings agency say they consider whether the agent is licensed or regulated when deciding which one to use*. Unfortunately this is not mirrored by tenants and we are committed to redressing this balance.

Industry bodies
An agency that has voluntarily joined the Association of Residential Lettings Agents (ARLA) or National Association of Estate Agents (NAEA) shows that it is happy to adhere to the highest standards and meet these external organisations’ customer service standard. For instance, all ARLA members are required to work within a robust code of practice, which covers the key stages in letting and managing a property. Regulated agents have to meet a standard of compliance that includes having Professional Indemnity Insurance, mandatory participation in a Client Money Protection Scheme and a structure for dealing with complaints and disciplinary procedures.

One of the only issues with choosing an ARLA or NAEA agency is that the industry bodies only require an office to employ one member of staff, in any office, with a suitable industry qualification. At Paramount we believe that all members of staff, especially negotiators, should study to become a member, as this ensures all staff have to undertake regular training and keep up to date with changes in legislation.

At Paramount, all staff members must be members of the Association of Residential Letting Agents (ARLA) or the National Association of Estate Agents (NAEA). If we recruit any new members of staff that don’t belong to one of these bodies, we require them to start their training within a month of joining us.

It’s not just our sales and lettings negotiators that take the exams though. Other members of staff, including administrators and accounts, are encouraged to join too. This is a huge benefit for our customers who meet property experts the moment they walk through the office door. All customers are made aware that everyone they deal with in the office is qualified. They understand that they can tap into our knowledge bank regardless of who they are speaking to – they don’t have to wait to speak to a director to receive expert advice.

Internal confidence
The benefits of a licensed agency are felt internally as well as externally. We invest heavily in our staff and finance their initial and ongoing ARLA and NAEA training. Being a member of NAEA is important to us as a company and as individuals. It’s essential that we keep up to date with any changes in legislation and our customers appreciate us passing our knowledge onto them.

I recently asked colleagues what belonging to an organisation like ARLA or NAEA meant to them. They believe it portrays credibility to the public and suggest it shows that you are serious about your career. It would be great to hear your thoughts on the matter – does an agents membership of a regulatory organisation carry weight with you?

In the meantime, don’t forget to enter our #whampplanet competition. Learn how to enter here.

Spencer Lawrence
Lettings Director
Paramount Properties
150 West End Lane
West Hampstead
020 7644 2314

 

*Association of Residential Lettings Agents Residential Landlord Survey 2013

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Property News: Renters are people too

When choosing an area to live in, what is your main priority?


Place your vote and we’ll update you on the results on Twitter next week.

There is a common assumption that tenants are not invested in their local area and don’t care about what is going on. When the #whampforum was hosted in May it exposed the views of a minority that ‘young people aren’t invested in the area emotionally or financially because they don’t own property, so why would they care’. That’s a huge assumption and one I would dispute in my experience.

Tenants have often been considered a transient part of the population, but this is no longer always the case. The tenants we let property to have researched different areas and made a choice to move to West Hampstead. Many will rent for several years in the same area and are just as invested in the local community as those who own a property. Their priorities might be different (a family who own their home are more likely to participate in the free school debate than a single professional renter) but this has little to do with property ownership.

For some, renting is a stepping stone to home ownership. One benefit or renting is that it allows you to trial out life in an area before committing to staying for longer and this type of tenant is likely to have a very vested interest in the strength of the local community. Reasons for renting aside, considering that 44% of households in West Hampstead live in private rented accommodation (12 percentage points higher than the average across Camden), tenants are clearly essential to the future of the area, economically, politically and socially.

West Hampstead is renowned for its local village feel and community. There are numerous resident groups and local organisations that are incredibly active for an area of London. West Hampstead is unique because the high street continues to thrive with popular independent shops, restaurants and cafés and tenants are essential for their future. West Hampstead used to be considered the Ugly Sister of the area compared to St John’s Wood and Hampstead. Nowadays it is less of a thoroughfare and more of a destination in its own right, catering to its residents with local shops that thrive as they meet the community’s needs.

It wouldn’t be right to talk about the local community without mentioning Twitter. It is an incredible source of local information (often helpfully curated by @WHampstead) and provides a resource and real life social network for those new to the area. The #whamp hashtag, with its various suffixes, has solidified the community, engaging and activating local people irrespective of housing tenure.

As an estate agency it has always been important to us to get involved in the local community, socially and financially. We are proud to support local businesses and have done so since our inception. We take advantage of local and independent services wherever possible; from the printers we use to the independent restaurant we have team meetings in.

Last year we designed cotton bags to help launch the West Hampstead Farmers’ Market, which has become an asset to the area. Every Saturday we look out of our office window and see how popular it is, with regulars returning week after week. Due to the popularity of the bags we recently decided to print some more with a new design. We worked with an illustrator just as passionate about the area as us to create our very own West Hampstead map, and although all of our favourite independent shops couldn’t fit on the design we hope it sums up what is special about the local community.

Please pop into our office to collect your free #whamp bag.

Spencer Lawrence
Lettings Director
Paramount Properties
150 West End Lane
West Hampstead
020 7644 2315

 

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Property News: Tenants’ extra rental

To accompany our regular pieces about the property sales market, Paramount is going to be covering the rental market in West Hampstead. Do leave comments (note, they will be moderated!). Even though these articles are being written by an estate agent, I’m making sure it’s honest comment of the industry and market!

Landlords need to think long-term

We thought we’d kick off our series of Property News articles with a question:

What’s the benefit to you of renting?


Place your vote and we’ll update you on the results on Twitter next week.

How many households in West Hampstead do you think live in private rented accommodation? According to the 2011 census it’s a staggering 44%, which is considerably higher than the average percentage across all Camden Wards (32%).

For many years West Hampstead has been a desirable place for people to call home. Renters are drawn to the area for a number of reasons, including the often cited transport links. The lettings market is based on supply and demand so it’s no surprise that, with the strong demand, the market has favoured landlords over the past few years. However we have now reached a point in West Hampstead where supply is plentiful, and as stock levels increased we began to see a downturn in rental prices.

The supply can be attributed to three main reasons: a lacklustre employment market in financial services sectors, an increase in overseas investors and the rise of ‘accidental’ landlords. Control of the market has swung from landlords to tenants, and landlords have to be realistic about rental prices if they want to minimise void periods and protect their yields.

Why has demand dropped? One reason is that since the census the government has implemented its Help to Buy scheme for first time buyers, which has helped a number of tenants in the area take their first tentative steps on the road to becoming homeowners. Demand for rental properties has shifted to demand for 1 and 2 bedroom flats for sale, with our sales department regularly receiving sealed bid offers significantly over the asking price for these types of properties.

Another reason is that tenants are looking to stay for longer in the same rental property. Instead of moving home every year, tenants in West Hampstead want the stability of a home and once they find the right property they are happy to renew year after year. We support longer tenancies and encourage landlords to invest in the property for this reason.

This type of tenant needs a flat that matches their lifestyle in order to stay, so a professional clean at the end of a tenancy is no longer enough to get a new long-term tenant in. As letting agents we don’t charge tenants a renewal fee as we want to encourage them to stay for longer as it helps minimise the landlord’s void period.

In the last couple of years there has been a shift in the market; it is more price sensitive and product sensitive too. Landlords have to put capital investment into their property and often need to redecorate, redo the bathroom or lay new carpet between tenancies. As tenants have more choice, landlords need to make their product appealing as the rental market becomes more competitive.

Are you a tenant in West Hampstead? What does being part of a local community mean to you? We’d love to hear your thoughts for our next Property News in October.

Spencer Lawrence
Lettings Director
Paramount Properties
150 West End Lane
West Hampstead
020 7644 2315

 

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