Even with the General Election on the horizon property
values in Hampstead are still 1.69% higher
than they were 3 months ago. The diversion
and ambiguity of an election typically makes house sellers who need to sell, price
their property more realistically (although this only lasts a couple of months).
Looking specifically at it from a Hampstead landlord’s point of view, the Hampstead
properties favoured by investors are in short supply in many parts of the suburb
because of a number of factors. One of the factors has been that we have seen
the number of first time buyers coming to purchase their first home increase
over the last 12 months in Hampstead. Another factor has been the fact that banks
have been pushing ‘let to buy’ (yes ‘let to buy’ is different to ’buy to let’) to
homeowners (more of ‘let to buy’ in an up and coming article). Next,
because of the banks, who are chasing low risk landlords with high deposits
with very low mortgage rates- and the low risk landlords with high deposits
tend to be attracted to the safer modern two and three bed town houses and semis
in Hampstead.
As I mentioned a few weeks back, the pension rules are changing which
means buy to let landlords can use some, or all, of their pension pot to buy a
property. It shouldn’t be forgotten
there are tax implications taking more than a quarter of your pension pot out
(see the article from a couple of weeks ago) , so whilst many pension pots may
not be able fund a suitably big enough tax free lump sum to buy the property
outright, for most it will provide enough for the 25% deposit (required by most
BTL mortgage providers). As a reminder to landlords, the interest paid on the
mortgage is tax deductible against the rent, thus lowering your income tax
paid.
In the last 12 months, I have noticed a particular uplift in interest from ‘50
something’ Hampstead people wanting to become landlords for the first time. In Hampstead,
the highest returns for the lowest investment are at the lower end of the
market eg the classic apartment . Unfortunately, apartments with one bedroom are
coming to the market in smaller numbers than the larger four bedroom properties
in top end sector of the Hampstead property market. When looking at the actual
numbers, in the later part of the Summer of 2014 in Hampstead, in one month
alone 72 one bed apartments were on the
market in Hampstead. However, in January this year, a notoriously excellent
bumper month for properties coming on to the market, there were only 69 one bed
apartments on the market in Hampstead to choose from. Today, that figure stands
at only 52..whilst the number of four and five beds has increased significantly
... interesting don’t you think?
At that lower end of the property market in Hampstead, (ie
where first time buyers and landlord investors compete with each other to buy
those smaller properties), I believe throughout 2015, there will be a slow and
steady tipping of the scales between supply and demand. In fact, from what i am
seeing and hearing, early anecdotal evidence has suggested over the last few
months (although we will need to look at figures later in the Spring once we
have the data from The Land Registry), we are beginning to see a polarised Hampstead
property market. We will have high demand but low supply at the bottom end of
the property market, yet high supply but lower demand at the top of market... and
that can only mean one thing ... prices will go up quicker on the smaller
properties than the larger ones in Hampstead, thus narrowing the gap for people
looking to move up market.
If you want a chat about the best sort of property that will
offer you this in Hampstead or Belsize Park, then feel free to drop me a line chris@ashmoreresidential.com or visit the Hampstead and Belsize Park property
blog www.NW3propertyblog.com
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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