I had this really interesting chat with one on my tenants
the other day, on renewal of their tenancy agreement. They are a lovely couple,
early thirties and I know they have decent jobs in Hampstead. They have been
tenants of ours for quite a while, so I know them quite well.
We got talking and I enquired if they ever thought of buying a property for themselves, to which they replied back with the title of this article. It made me think and so I did some more research into the subject which I want to share with you.
We got talking and I enquired if they ever thought of buying a property for themselves, to which they replied back with the title of this article. It made me think and so I did some more research into the subject which I want to share with you.
After the end
of the Second World War, just over a quarter of the UK population owned their
own home, the rest rented from private landlords or the local Council. If
someone told you in the 1970’s and 1980’s that they rented, they were
considered a second class citizen. Everyone wanted to own their own home.....it
was the done thing. We think that home ownership will inevitably happen, but it
won't.
It all
changed in the 1970’s, when two things happened. Firstly, the number of people
who owned their own home broke through the 50% barrier in 1971 and by 1981 it
was at 57%. Tied in with that, the average house prices in Hampstead were
doubling at one point every four years in the 1970’s so property and profit
started to feed off each other.
To put that growth in context, if we were to look at the
last 85 years in Hampstead, in 1930, the average Hampstead property was worth
£2,680. It took 16 years for Hampstead property values to double, rising to
£6,627 by 1946. Another 15 years and the average Hampstead property doubled
again to £12,582 in 1961. The next doubling only took 10 years, as by 1971 the
average Hampstead property had reached £25,582 in value.
It was (as mentioned above) the 1970’s when things really
took off, as by 1975 (i.e only four years) they had doubled to £53,539 and they
doubled again to £107,179 by 1980. It took another eight years for values to
double again, as an average Hampstead property reached £224,183 in 1988. Twelve
years had to pass until they doubled again in 2000 (£461,265) and just six
years to double again by 2006, when they reached £940,311. Where are we today?
The average property value in Hampstead
currently stands at £1,434,700.
We could
blame Maggie Thatcher for making home ownership the ultimate goal, but what we
now need to consider is that the country is turning on its head and we need to,
as a Country, love renting again. Some blame the banks, but obtaining a 95%
mortgage is hard work, but nowhere near impossible. A typical Hampstead first
time buyer would only need to save £11,000 for a deposit and fees and they
could buy a very decent property. For example, you could a property in Maitland
Park in Hampstead, and it would be cheaper each month in mortgage payments than
renting.
People might say on the surveys they want to buy, when it
comes down to it. If you have been living in a top of the range large property
in the West Heath Road area, but the bank will only lend you enough to buy a
smaller property in Maitland Park what would you do? Don’t get me wrong,
Maitland Park has really pulled its socks up over the last ten years, but it
isn’t the West Heath Road area, is it? Again, if you were a twenty something,
what would you do? Look again at the title of the post ... “The way it
works in Hampstead, you have to rent where you want to live, or buy where you
don’t want to live,”
If you are looking for an agent with experience that can help you find the right tenant for your property, then contact us to find out how we can get the best out of your investment property. Email me on chris@ashmoreresidential.com or give me a call on 020 7435 0420. Pop in for a chat – we are based on Ashmore Residential, Suite 7, 25-27 Heath Street, London, NW3 6TR. The kettle is always on.
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