Author: Paramount Properties

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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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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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

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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

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