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David Matthews

Property News: Impact of abolishing tenants’ fees

David MatthewsTenants will be delighted at the announcement last week that administrative fees to tenants are to be banned, effective immediately. Whether costs to landlord might increase as a result is yet to be seen. Our view is that anything that can be done to improve transparency in our business has got to be positive. Flushing out the less scrupulous of our industry is what all good agents want to see happen. For tenants worried that this policy will result in an increase in rents, fear not, we can’t see this happening. We think that the industry is going to innovate around this to the benefit of tenants and landlords.

We are looking forward with anticipation to the completion of Heritage Lane (a.k.a. West Hampstead Square). We are reliably informed that the first two blocks will complete in late January and have been approached by landlords looking to let flats in these blocks. Having had a number of tours of the scheme, we love the specification, especially the unusual choice of brass fixtures and fittings as opposed to the normal chrome. A heritage finish for Heritage Lane, so to speak.

We are also agents on the commercial units at Heritage Lane and have seen huge demand from local businesses and healthcare practitioners for space. To compliment west Hampstead’s new M&S, due to open early next year, we are excited to add more to West End Lane’s growing commercial offerings. We recently secured Gails and soon look forward to announcing another ‘tasty’ addition to the high street….

David Matthews
Dutch & Dutch
174 West End Lane
West Hampstead
NW6 1SW
020 7794 0075
moc.h1490406319ctudd1490406319nahct1490406319ud@of1490406319ni1490406319

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David Matthews

Brexit tests the nerves of West Hampstead property market

David MatthewsIt won’t be a surprise that it’s been a testing couple of weeks for London property. Tenants, buyers and indeed sellers have gone “a little quiet” to quote an understated fellow West Hampstead estate agent.

The post-referendum market feels very unnerved by the decision to leave the EU. Commercial property funds have been closing their doors, house builders’ shares have seen big falls and locally there are examples of buyers pulling out of purchases or re-negotiating the price.

This is of course all a fairly predictable outcome given the result of the referendum. After all the prime minster predicted house price drops of up to 20%, which was never going to instil confidence in a market already starting to feel a change in the wind. As it happens, we haven’t seen anything like 20% falls and most buyers are proceeding with fairly modest single figure percentage discounts at most.

The outcome of the referendum has been the catalyst, crystallising changes in the market that were already taking root. Stamp duty increases and the removal of mortgage interest relief were already putting downward pressure on prices, which of course was the intention of these policies in the first place. So no bad thing there, at least for the first-time buyers who are the intended beneficiaries.

However, Brexit uncertainty has potentially so many more wide-reaching consequences. How it will affect the property market in London is unknown. Only when the exit route is laid out and we have some idea what an independent UK will look like, will we be able to predict the impact on demand, supply, house prices, rents, housing policy and so on. Until then there will be a lot of questions on people’s minds: Is now the time to move? I was thinking of upgrading, is now the time to get a bigger mortgage? Is now the time to sell my investment flat? Are prices going to fall further?

What is certain is that it is uncertainty causing the problems. The route to EU exit is pretty unclear and there is no one at the helm. In time this will change, a new prime minister, and perhaps a new government, will take control, the fog will gradually clear and the market will find its feet.

The good news is that many young people still place huge importance on buying their first home. This week, we agreed the sale of a one-bedroom flat in NW6, at the asking price, to a first-time buyer who is very excited at the prospect of owning her first home–a desire too strong to be eroded by current economic and political uncertainty.

David Matthews
Dutch & Dutch
174 West End Lane
West Hampstead
NW6 1SW
020 7794 0075
moc.h1490406319ctudd1490406319nahct1490406319ud@of1490406319ni1490406319

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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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Tenants

Property News: Tenants on the move

Now the dust has settled I finally feel like we can share some of our feelings about how the General Election affected the lettings market this year. Although it certainly hasn’t shaken up the market, we have noticed a couple of significant shifts in the months immediately post the 2015 General Election.

The first point of note is that following the General Election we have experienced more tenants serving notice to terminate their contracts than is usual for this time of year. After speaking to these tenants the consensus is clear; tenants were nervous about what the outcome of the General Election might mean for them and waited for the results before searching for a property for sale.

We’ve found that tenants who previously rented at the higher end of the local market are doing all they can to get onto the mortgage ladder as interest rates continue to remain historically low since the General Election. There’s a clear mortgage battle in play between the market lenders too and some tenants in the area are using this opportunity to benefit from competitive rates for first time buyers with a small deposit or low loan-to-value.

I’ve mentioned in previous articles that over the last few years tenants are staying in the same rental property for longer as the private rented sector becomes the norm for many Londoners. Due to this it’s always really interesting to speak to tenants when they serve notice to understand where they are going next. Since the General Election the majority of tenants who have served notice on their West Hampstead rental property have done so because they’re searching for or found a property in the local area. With property prices at an all-time high in London, this strongly suggests that tenants like to trial an area before committing to an expensive purchase.

Although more tenants are moving on than usual for this time of year, demand still significantly outstrips supply. As usual this comes with a caveat; applicants are very sensitive to the quality of the product and even in a buoyant market properties that do not suit the taste of the searching demographic will sit empty. Considered capital investment is imperative when attracting tenants, with a further benefit being a direct correlation between a well maintained property and length of tenancy. At Paramount we’ve found that well finished and fully managed rental properties boast average tenancy lengths of 36 months.

We’ve also seen a small rise in the number of landlords who have decided to sell their buy-to-let investments this year. Landlords who have owned their rental properties for 10+ years with low gearing are leading this trend, and some have decided to look for new buy-to-let opportunities in different areas that offer more value to tenants to ensure they continue to attract young professionals.

Those looking to rent in West Hampstead will be pleased to know that we have plenty of properties coming onto the market this month. This is a great time to search for something new as the market will only get busier with applicants as the summer season progresses.

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

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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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Gladys Road exterior

Property News: Rental market buoyant in run up to election

This poll is closed! Poll activity:
start_date 17-04-2015 12:20:00
end_date 01-05-2015 23:59:59
Poll Results:
Are you for or against the mansion tax?

With the General Election looming we’ve been looking back at the last five years in terms of the local property market. Since the last election we’ve seen the introduction of the Help to Buy scheme and a reform of stamp duty, with the latter saving the average first time buyer in West Hampstead thousands of pounds.

Labour is pledging 200,000 new homes a year by 2020 in its manifesto (vs. the Liberal Democrats’ 300,000), in order to create much needed new homes. Labour also wants to address letting agents’ fees to tenants and change legislation in favour of three-year tenancies. Meanwhile the Conservatives want to extend Right-to-Buy to tenants in Housing Association properties and double the number of first-time buyers in comparison to the last five years.

We took a closer look at some of our own statistics to see how things have changed since the last election. We’ll be publishing content regularly on the Paramount blog in the lead up to the election, but one thing we’ve identified so far is that in Q1 2015 there has been a 22% decrease in 18-24 year olds showing interest in properties to rent and buy in West Hampstead compared to the same period in 2010, with a 20% increase in 25-34 year olds looking in the area. I doubt this will come as a surprise to many, with London in general often out of reach for buyers and tenants alike.

Politics aside, as we head into the second quarter of 2015 the lettings market is buoyant. Enquiries have increased month on month since the start of the year, which is usual for the lettings market. The market historically picks up considerably after the Easter bank holiday weekend and this year was no different, with a lot of applicants looking to find new suitable homes over the last week and a half. We expect garden flats to be extremely popular over the next few weeks now that the daffodils have appeared and the daylight hours have got longer.

There continues to be a fair amount of properties for tenants to choose from, although good quality, competitively priced one and two bedroom properties are letting in record time. It’s a notable change since March – just one month ago tenants were taking longer to commit to properties, and landlords were finding the market quite competitive.

Despite the ever fluctuating nature of supply and demand locally, rents have increased by approximately 3% compared to this time last year. In some instances rents have increased by much higher than this, but that’s occurring more in Queens Park than in West Hampstead.

Although demand for properties is high, landlords need to continue investing in the properties. Quality of stock is very important and tenants expect a quality finished product to move into. Landlords that deliver this will find excellent tenants who want to treat the property like a home in a very short space of time.

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

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MatthewSheldon_grey_ft5

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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LivingRoom

Property News: West Hampstead tenants’ extra expectations

I’m worried that I’ve started to sound like a broken record. Every two months I write about the rental market for West Hampstead Life, and every two months I say the same thing: demand for rental property in West Hampstead is sky high.

I promise you that this isn’t laziness on my part. Demand for rental properties in West Hampstead continues to grow, especially for one and two bed flats. These flats are regularly on the market for just a matter of days before contracts are signed and a move-in date is set.

Although demand has been continuously high for many years, not everything remains the same though. One thing we have noticed over the past year is that our applicants now have an excellent knowledge of the local rental market. They do their research, they understand how the market operates and aspirational levels are rising too. They’re familiar with the property specifications found in new build developments and they expect this standard of presentation from all rental properties. We regularly feed this information back to our landlords and encourage them to treat their rental property as a business, by injecting regular investment into the property by way of new carpet or a new kitchen if needed.

Demand might be strong but applicants won’t accept a property if it doesn’t match their expectations. In order to let property as quickly as possible so we can avoid void periods, we advise landlords to present the flat to the best of their ability. Presentation is key when attracting tenants, and that includes communal areas as well as the property itself. The entrance of a residential building is equally important, and landlords who own flats in a period conversion should consider joining forces with other owners to smarten up communal areas if necessary.

Feedback from tenants in 2015 highlights that proximity to an underground station is high on most of their wish lists. Properties further than 10 minutes from the tube are slower to let and applicants would rather compromise on square footage if the location is good. It’s always been about an applicant’s lifestyle choices, and proximity to excellent transport links is more important than ever.

As I mentioned earlier, applicants have a better knowledge of the local property market than ever. The internet is key for sharing information and it’s great to see more and more people aware of what is happening in the local market. Perhaps because of this applicants are very sensitive to price, and they are prepared to negotiate to reach an agreement that is acceptable to them. Landlords who are also prepared to negotiate a bit will find their property lets more quickly.

In order to provide the very best service to applicants, tenants and landlords we’ve needed to expand our business. I’m thrilled to welcome two new Lettings Negotiators to the Paramount team, and I look forward to sharing their experience of working in West Hampstead with you over the coming months.

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

request a lettings valuation

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Snowhouse

Property News: Protect those pipes this winter

December is notoriously quiet in the property industry and, once again, the local lettings market has seen reduced stock levels during the latter part of November and the month of December.

One of the reasons we are quiet on the lettings front is because of our seasonal lock-outs. For many years our tenancy agreements have included a lock-out period precluding landlords and tenants from serving notice during this timeframe. This protects landlords from void periods or being forced to accept reduced rates, both possible consequences when marketing a rental property at this time of year. Equally there is a lack of availability for tenants and the quality of the product tends not to be as good.

At Paramount we use this opportunity to gain new business by taking the time to nurture our existing database. This year the winter months have also allowed us to get our lettings team out and about visiting tenants, to make sure they are happy and settled before the festive period. Consequently we have been made aware of a few lingering maintenance issues that we can now fix quickly to ensure product control.

We have also been providing guidance to our tenants about keeping their property safe and warm over the winter months, which is good advice for all:

Going away this winter?

  • Leave your heating on for at least an hour a day while you are away to stop the pipes freezing
  • Leave your heating on all day and night at your usual temperature setting in severe weather conditions
  • Ask a friend or neighbour to check in at your property whilst you are away so any emergencies, like burst pipes, are detected as quickly as possible
  • Secure ladders and any garden furniture to prevent any damage if there are high winds

Keep your home warm

  • 16°C is the ideal minimum temperature and your main living room should be between 18-21°C
  • Draw your curtains at dusk to help keep the heat generated inside your rooms
  • Use thermal curtain lining on the inside of your curtains
  • Keep radiators free of obstructions to allow heat to pass around the room
  • Prevent cold air moving around the house by closing internal doors

Reduce energy costs

  • Turn off radiators in rooms you don’t use often
  • Use energy efficient light bulbs when possible
  • Wash clothes at 30 degrees and air dry them when possible

For low income and vulnerable households there is support available through the Warm Home Discount, which can provide a discount on your energy bill of £140 in 2014/15. Phone your energy suppliers to see if you are eligible. Another easy way to get your energy bills down is to switch to the lowest possible tariff. To do this contact your energy supplier and competitors and ask to be put on the best tariff.

Insurance
It always surprises me how many tenants have never had any kind of contents insurance. There seems to be a strong misconception that while living in a rented property, a landlords building insurance will cover a tenant’s possessions. Unfortunately this is not the case. Should your house or flat be burgled or flooded, your landlords insurance will only cover the building and their furniture and fixtures.

Unfortunately we witnessed an instance like this earlier in the year, when a basement flat had been flooded in the freak rain we had in September. While the landlord was able to claim on their own buildings insurance for repairs to the flat, the tenants’ possessions, including a computer and phone, had been so damaged they were unable to be repaired.

It might not sparkle, but if you buy yourself one Christmas gift this year invest in tenants’ contents insurance. It may be your best investment of the year.

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

request a lettings valuation

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Darryl-Jenkins_ft

Property News: What will drive the housing market in 2015?

At this time over the last couple of years I have had a go at predicting what’s in store for the local sales market in the next 12 months. On both occasions, with a bit of good fortune and hopefully not too much smugness, I have got it mostly right; so here are my thoughts on this year and predictions for 2015.

Like any great football match, this year has been a tale of two halves. Although I forecast the majority of the growth in prices would come in the first half of the year I did not envisage the slow-down in demand from August onwards. The spectre of an interest rate rise was always on the horizon, which at some point would have slowed the market, but it was the MMR changes to mortgage borrowing requirements and the surprise resurrection of the Mansion Tax that really put the brakes on.

The change in mortgage criteria has meant that lenders are now lending 3 to 4 times salary as opposed to 5 or 6. It also means that all outgoing expenses, including school fees, dry cleaning etc.. are now considered when assessing someone’s ability to repay their mortgage. We have also seen the end to interest-only mortgages. This has all taken the froth off prices by simply reducing the amount buyers are able to offer.

The Mansion Tax proposal by the Labour party has created an uncertainty about future affordability too. The London market needs sales of £2 million-plus properties to keep the wheels turning and the temporary withdrawal of some of these buyers has affected demand across all price ranges.
So, the factors in the mix for 2015 are interest rates, the election, the economy and, as ever, supply and demand.

Financial markets are now predicting small interest rate rises for the middle of 2015 and that they will then rise gradually to 3% over the next few years. Although the UK economy is growing there is still some cautious sentiment amongst investors and businesses about the sustainability of this due to the weakened European economies. However, UK employment is on the up and the outlook seems set to fair. Recent low inflation of 1.2% means that interest rate rises are more likely to be after the general election.

Yes, the election. It seems to be the subject on most buyers’ and sellers’ minds at the moment and I suspect a lot of people are waiting for the outcome before making a decision about their property-owning future. I have just sensed recently that a consensus is growing that Labour will not get in this time around.

The low supply of new and existing property in London is well documented and West Hampstead is no different in this regard. Even though there has been a fall in demand, we have not witnessed a huge influx of property on the market, meaning that although price growth has stopped, achieved prices are not yet falling back from those set earlier in the year. If a property comes to the market at a realistic price there will be a healthy demand for it.

Property industry heavyweights Savills and Knight Frank are predicting growth between -0.5% and 3.5% for London in 2015. I believe that by the time of the election a backlog of demand will have built up and we could potentially see a strong market for London and West Hampstead for the rest of the year assuming the Conservatives are elected. Given that interest rate rises are likely to be minimal and that there are some excellent fixed mortgage deals available, together with confidence in the wider economy and continuing poor supply, I can still see enough room in the market for further increases of up to 5% across 2015 in our area, although this will all come after May.

As the next Property News will be in January, may I take this opportunity of wishing you all a happy Christmas and New Year and thank you for taking an interest in my articles to-date.

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

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Property News: Rental oversupply on the horizon?

In our last property news article we asked “what influences you when choosing lettings agents”? The results were clear; reputation and recommendations are what matters to you the most.

Reputation and recommendations accounted for half of the answers submitted, whilst membership of a professional scheme (eg ARLA, London Rental Standard) came in at third place. It’s easy to cast aspersions based on the results, but it does strongly suggest to me that potential tenants are often overwhelmed (or should that be underwhelmed?) by high street lettings agencies and turn to friends, family and social media to seek out an agent they can start to trust.

There seems to a consensus that the higher the rent the better the lettings agent will be. This saddens me as there should be no correlation between product price and service in the lettings industry; every potential tenant regardless of budget or location is entitled to a professional, transparent service when renting a home. It’s easy to compete with other agents when they don’t even offer a basic professional service, but I’d much rather there was a minimum standard all had to adhere to in the industry. If this was the case all good lettings agencies would push themselves further, seeking to go above and beyond in order to offer the best possible customer experience.

July to September are traditionally the busiest months in the lettings calendar with new stock coming onto the market from July. This cyclical calendar caters to students and new graduates who typically search for properties ahead of courses and graduate schemes starting in September. This year international students drove the demand, mostly due to the area’s proximity to several excellent universities and business schools. Now we are in October stock is starting to dry up and we don’t have enough properties to cater for the demand.

This month it has been really interesting to see where new business has come from. We’ve seen a significant shift in landlord demographic, with 50% of new instructions coming from first time landlords. These new landlords have often been seconded overseas and are looking to rent their own homes out in order to maintain an investment in London.

Last Property News we used HomeLet rental index data to show that average rental values in North West London were £1,739pcm. One month later and the rental index shows average rents increased to £1,750pcm. This is now similar to the average rents in South West London of £1,785pcm, and 19.5% above the average rental price for Greater London which stands at £1,464pcm.

Although rents are currently strong in West Hampstead, a potential risk to the local rental market is the level of new stock being brought to the market by developers and overseas investors. Until a few years ago West Hampstead was relatively untapped for investments, but now the area has been found by those attracted to strong capital growth rather than rental yield.

The brand new developments being constructed on West End Lane, Maygrove Road and Iverson Road will see rental supply increase dramatically in 2015 and 2016. At this point we expect rents to come under pressure with a potential dampening effect on rental growth across a wider area, despite a broader and deeper pool of tenants.

Demand will continue to be strong and I’m confident that the best of West Hampstead is yet to come. We’ve always had excellent independent shops and the arrival of a greengrocer’s earlier this year and the promise of a butcher in the near future ensures the high street is catering to local’s daily needs.

On the topic of food, we’re lucky to have a great view of the new daily food market from our office and encourage you try it out if you’re yet to do so! We’ve noticed increased footfall between 4pm-8pm and we hope it continues to do well. Friendly vendors, excellent food and communal seating areas all add to the village feel; it might be a cliché but West Hampstead feels more like a community than ever.

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

request a lettings valuation

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Darryl-Jenkins_ft

Property News: September

I heard the news like everyone else last week that Foxtons had applied for planning permission for change of use of the old Post Office. Not surprisingly, my immediate thoughts were also like most residents – not ANOTHER estate agent! I then read, more recently, that there had been 20 complaints registered with Camden planning against the opening on the basis of too many estate agents in the high street (staggeringly, there are 29) and that the area does not need ‘the kind of business’ that Foxtons are.

But, can Foxtons really be blamed for all these estate agents? And what can be so bad about a company that is listed on the stock exchange and has made its original owner somewhere in the region of £925m (Sunday Times Rich List) based on the principle of making more money for home owners? It occurred to me that the issues communities like West Hampstead and other high streets face are much greater than stopping the opening of another estate agent will solve.

Firstly, the reason there are so many estate agents on London’s high streets is simple – easy money. When I say easy, I mean that there are very few barriers to entry. Anybody can either start their own agency or start work immediately without any formal qualifications or membership of a governing body. On top of this, most small to medium agencies provide no initial or on-going training meaning that your property could be sold or let by someone who has very little experience or knowledge of the conveyancing and letting process (even in the bigger brands). Since the 1960s house prices have climbed inexorably skyward significantly outstripping real earnings along the way. As estate agents are paid on a percentage of the sale or lettings figure this has meant that the lure of large fees with no barriers to entry has attracted so many agents to our high streets.

Although these large numbers have created some downward pressure on fees, they still remain largely the same as they have for many years, that is between 1% and 2% for sales and 9% to 10% of the first years rent for rentals, meaning that a 3 bedroom maisonette in West Hampstead of say, £750,000 (average for the area) or £600 per week will command fees of £7,500 to £15,000 for sales or between £2,800 and £3,120 for lettings. As of today’s date there were 648 properties listed for sale on Zoopla and 1145 for rent in NW6 so it’s easy to understand the attraction of claiming a piece of this potentially rewarding market without too much up-front investment.

There is an Ombudsman scheme for sales agents but membership of this is not compulsory and the punitive powers are very limited. A better scheme exists for lettings agents called ARLA, which provides guidelines and ethics requiring qualifications to be a member of, but again, is not compulsory.

I would like to see the introduction of a licence system similar to that operated in the US. This requires completion of nearly 100 hours of study of the sales and lettings process along with conveyancing law and ethical conduct guidelines in order to gain a licence to operate. Complaints would be dealt with by the overseeing body which has the power to revoke any licence. I believe this would go a long way to reducing the number of agents on the high street and also provide the consumer with some much needed comfort that the process was being handled by a qualified agent with an independent and impartial point of contact for redress if things do go wrong.

Secondly, the problems of the high street have been well documented recently, especially in the Portas Review conducted for the coalition government. The changes in the way we shop by either going on-line or to out of town shopping areas where access and parking are easy, has meant that fewer businesses are attracted to high street premises, especially when their rivals are not present. High rents, rates and generally outdated buildings requiring expensive repairing lease obligations in high streets where there is only passing footfall on the way to transport links (especially in West Hampstead) and nowhere to park, make these very unattractive to most retailers. Resulting in a high street typical of West Hampstead, with coffee shops, estate agents, charity shops, betting shops and fast food restaurants where convenience and turnover is key, not dwell times or pleasant shopping experiences.

The juxtaposition of this situation is that the coalition government is focussed on a planning policy of ‘Town centre first’ planning as outlined in the NPPF (National Planning Policy Framework). Developers are forced towards town centres by planning policies which involve passing centric and impact tests for any developments which are outside of the town centre. This is making it even harder to redevelop existing sites, which in some cases are empty shops, as developers are reluctant to invest in these sites as things stand.

Isn’t it time to accept that town centres in the traditional mould are no longer viable? Many of those who protest that the protection of our ‘village feel’ is paramount are perhaps missing the point. With residents who are only in transition through the high street shouldn’t we be developing new mixed use sites that incorporate leisure facilities with retail outlets making the town centre a more pleasant destination of choice which would more accurately reflect a village feel? The success of the O2 centre and JW3 go some way to demonstrating the popularity of this mix. The West Hampstead Square development also offers a mix of leisure facilities close to transport which has been incredibly popular and now sold out. Until the focus of change for our high streets is different premises like the Post Office will only be attractive to those businesses that can be profitable in the existing high street. Initiatives to regenerate the high street as a retail destination have so far stalled. In West Hampstead the Farmers market and food stalls although popular, demonstrate the transitory nature of passing trade rather than a shopping destination.

Perhaps the biggest conundrum of Foxtons is that most people I speak to seem to agree that buying, renting or selling through them is a pressured and uncomfortable experience. Phrases like ‘not the type of business West Hampstead needs’ are bandied about, but the reality is that when it comes down to it, people choose to use them. It’s not a ‘Marmite’ company, where you either love them or hate them, but a company which most seem to hate but secretly use. Like a dirty little secret, or an R Whites Lemonade drinker, for those of you who remember. It’s a simple model; win instructions with the promise of higher prices and then generate large numbers of viewings. In other words, more cash for you. The model works because it has enough success to justify its promise to other sellers or renters.

Arguably, Foxtons have made a large contribution to the London price boom over the last 20 years which has benefited many owners and Landlords in the process. Whether this is good or bad is another discussion. Of course, if you would like to achieve the same results with a more accessible and personal service please feel free to get in contact.

The other potentially good news for all naysayers is that industry experts predict the death of the high street agent in the next 20 years with agents moving to the on-line model. I’m not sure what high streets will be looking like then though?

Naturally, I am not looking forward to their arrival, but if we want to reclaim the high street we need to rethink our strategy for the future.

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

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Property News: Rental round-up

In January we conducted our first tenant survey, and discovered that 66% of tenants would prefer to rent through a letting agent than through a landlord directly. We thought it would be interesting to know what factors influence applicants when choosing agents to register with, so please select as many options from the poll that are applicable and we’ll let you know the results next month.

What influences you when choosing letting agents

Rental stock
Earlier this year we discussed how West Hampstead rents were suppressed due to reduced budgets and rising stock levels, as well as the surge in the residential sales market. Now in August we’ve seen the usual summer swelling of the applicant pool, which coupled with the current attractive rent levels has led to unprecedented demand for local stock.

Although demand is strong, we don’t expect a surge in rent prices anytime soon; rent rises will continue to be relatively modest as we progress towards autumn. This is because despite demand being strong, the market is still price and especially product sensitive.

Finance
On the mortgage front we’ve spoken to our landlords recently and discovered many are looking to change products. There’s a desire to move from current buy-to-let SVR’s to five-year fixed buy-to-let products, predominantly because rates are attractive and they want to lock rates in while they can in case interest rates increase.

Yields
One reader asked what the impact of a sudden boom of new flats in the area would be on rental prices/yields. As it stands I don’t expect there to be much of an impact as demand for property in the area is so strong. Yields are cyclical and even if they were to drop it wouldn’t disrupt the market. Buy-to-let in London is currently a self-regulating investment; when capital appreciation stagnates yields increase, and vice versa. Yield is a long-term investment vehicle and the only thing that will impact it is the price of purchase.

Rents
The HomeLet Property Rental Index highlights that average rental values in London were 9.4% higher in July 2014 when compared to last year, when average rents were £1,295pcm. Their North West London figures show that average rents in July 2014 are £1,739pcm, a rise of 11.3% on the average rent of £1,562pcm from July 2013.

Housing bubble
On a final note, John Mennis recently asked on Twitter what a “bubble” was. We did a little research and we can trace the first use of the word “bubble” in a market contenxt to the early 18th century, when it was used to describe what happens when ‘the price of assets temporarily rise above true values, only to burst and cause a sudden decline’. Before “bubble” became part of the discourse, “mania” was used to describe the same economic effect.

You’re not alone with your criticism of the word John; Peter Garder describes the word “bubble” as a ‘fuzzy word filled with import but lacking a solid definition’ in his book Famous First Bubbles: The Fundamentals of Early Manias. And that’s your history lesson over for the month!

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

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West Hampstead’s housing bubble: Deflating not bursting

If the bubble were a balloon then it hasn’t so much burst as been untied and blown around the room deflating and losing all forward momentum and energy over the last few weeks.

All of the industry heavy-weights and recent press coverage are reporting falls in asking prices and buyer demand across London; West Hampstead is no different. Rightmove has reported asking prices in London now at a virtual standstill for June and July, although it says prices are up 14% year on year. Sequence reports a month on month fall in June of 14% for new applicants whilst a Hometrack survey of Estate Agents in July tells us that house price growth in London has slowed ‘dramatically’ and is the weakest in 18 months with agents finding it “hard to push prices in the face of weakened demand”.

The Hometrack findings seem alarmist and in my opinion, simply mark the end to ‘open day frenzy’, ghost gazumping (being forced to raise your offer due to the increasing market alone) and ‘sealed bids’, which is no bad thing. It feels like the market has stopped off at the service station whilst affordability and common sense catch up.

There is no doubt however that demand has fallen significantly over the last 2 months and the question most buyers and sellers are now asking themselves is whether this is a seasonal blip or a longer term trend. The reasons for the slowdown in demand have been well documented and speculated about over the last few months; stricter lending affordability stress testing for mortgage applications introduced from the MMR, the spectre and inevitability of rising interest rates, the strong pound making London property less attractive to overseas buyers, next years’ election getting closer, press speculation over the ‘London bubble’ and strategic rhetoric from Mark Carney. All of these factors have combined to alter buyer sentiment to a ‘wait and see’ view rather than the bun fight that epitomised recent months.

There is, however, one overriding factor driving the London market and that is the supply of property and land compared to the increasing population and long-term demand, which must mean that prices will continue to rise over the long term although hopefully in a more controlled and steady way. We are anticipating a quiet summer with little or no growth in asking prices followed by a return to a more normal market in September.

In an earlier Property News this year I wondered what tools Mr Carney had available to him other than interest rates to control the UK housing market. We now have our answer and they have been very effective and imaginative tools. If we have successfully avoided the ‘boom and bust’ of previous attempts it looks like the UK housing market could be in very good hands. All we need now is to sort out the planning system.

On a separate note, I noticed that soon after the last Property News ‘Build high or fiddle while Rome burns’ Camden Council has announced plans for a 14-storey tower block at the Liddell Road site. I was surprised at the amount of objection to this proposal. A much needed development that provides a school and one- and two-bed flats close to transport links at no cost to the taxpayer seems like a good idea for West Hampstead. Surely, it is only with the increase in supply of new homes that we can hope to make London affordable for future generations of key workers? Light industrial sites close to railways make ideal sites to build high with the least impact on surrounding conservation areas or green belt land further out.

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

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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

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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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Inventory

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

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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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private rents

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

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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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Darryl-Jenkins

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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Spencer Lawrence_Paramount

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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