Tag: property news

Property News: Prices up but supply still stifled

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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July 14, 2015
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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June 17, 2015
Property News: The impact of the election on house prices

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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May 12, 2015
Property News: Rental market buoyant in run up to election

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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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April 17, 2015