We've just rented out a pretty decent studio flat for a new client this month in the same location and this one bedroom on Adelaide Road has come up for sale and thought it would be a good one to put out there.
This blog follows the buy-to-let market in Hampstead. You'll find tips, guidance, and analysis that relates specifically to Hampstead and you'll also find properties from all the estate agents in the town on here that may make decent investments. I own and operate Ashmore Residential, a Hampstead Estate Agents, and if you're thinking of buying a property to let in Hampstead, I'm happy to offer a second opinion.
Wednesday 30 September 2015
Monday 28 September 2015
Buy to let Investment - Refurbished studio flat - Belsize Grove NW3
I liked the look of this self contained studio that i spoke about back in June and now its been brought back to life and up for re sale. This was part of an auction lot offered through Allsop. The current owner has cheered it up somewhat and its got a decent specification. The idea of the pull-down bed isn't every one's cup of tea as one has to go through the rig morale of the process day in day out. On the plus side though, you can make the best use of the space on offer.
Friday 25 September 2015
Hampstead’s £1.91 billion Mortgage Powder Keg
Eight years ago, in the summer of 2007, hardly anyone had
heard of the term ‘credit crunch’, but now the expression has entered our daily
language and even the Oxford Dictionary.
It took a few months throughout the autumn of 2007, before the crunch
started to hit the Hampstead Property market, but in November / December 2007,
and for the following seventeen months, Hampstead property values dropped each
and every month like the proverbial stone. The Bank of England soon realised in
the late summer of 2008 that the British economy was stalling under the
continued pressure of the Credit Crunch. Therefore, between October 2008 and
March 2009, interest rates dropped six times in six months from 5% to 0.5% to
try and stimulate the British economy.
Thankfully, after a period of stagnation, the Hampstead
property market started to recover slowly in 2012, but really took off strongly
in late 2013 / early 2014 as property prices started to rocket. However, the
heat was taken out of the market in late 2014/early 2015, with the new mortgage
lending rules and some uncertainty, when some people had a dose of pre–election
nerves.
With the Conservatives having been re-elected in May, the
Hampstead property market regained its composure and in fact, there has been
some ferocious competition among mortgage lenders, which has driven mortgage
rates to record lows. Whilst I have no actual figures to back this up, I know
an awful lot of long serving bank managers, mortgage arrangers and people in
the finance industry, all of whom have told me on previous occasions when
interest rates rose (1987, 1992, 1997 and 2003), it wasn’t the first rate rise
that was the catalyst for many homeowners and landlords to remortgage but the
second or third increase. The reason
being that it was only by the time of the third rate rise, it started to hit the wallet. However, the issue is, by the time of the
second or third rate rise the best fixed rates, were in all instances, no
longer available as they had been pulled by the banks months before.
But here is the good news for Hampstead homeowners and
landlords, over the last few months a mortgage price war has broken out between
lenders, with many slashing the rates on their deals to the lowest they have
ever offered. I read that the well respected
UK
financial website Moneyfacts said only a couple of weeks ago, the average two
year fixed rate mortgage has fallen from 3.6% twelve months ago to just under
2.8%.
Interestingly, according to the Council of Mortgage Lenders,
the level of mortgage lending had soared to a seven year high in the UK . So what about Hampstead? In Hampstead, if you added up everyone’s
mortgage, it would total £1.91 billion.
Even more interesting is when we look at Hampstead and split it down
into the individual areas of the town,
- NW3 1 - £273.2m,
- NW3 2 - £400m,
- NW3 4 - £429.7m,
- NW3 5 - £295.2m,
- NW3 6 £216.m
- NW3 7 £300m
Since 1971, the average interest rate has been 7.93%, making
the current 0.5% very low. So, if
interest rates were to rise by only 2%, according to my research, the 4,118
Hampstead homeowners, who have a variable rate mortgage would, combined, have
to pay an approximate additional £21,819,600 a year in mortgage payments.That means every Hampstead/NW3
homeowner with a variable rate mortgage, will on average have to pay an
additional £9,296 a year or £775 a month in interest payments.
I know over the last
couple of posts, I have talked about mortgages a lot however, I am not a
mortgage arranger but a letting / estate agent and as regular readers know, I
always talk about what I consider to be the most important issues when it comes
to the Hampstead Property market and at the moment, in my humble opinion, this
is the most important thing!
Buy to let is all about maximising your investment, increasing
income and reducing costs. I give
advice, opinions, thoughts, concerns, worries, expectations and fears about the
Hampstead Property market in my blog on the Hampstead Property Blog. If you are interested in the Hampstead
Property Market, you might learn something by visiting the 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.
Don't forget to visit the links below to view back dated deals and Hampstead Property News.
NW3 Eye Candy- Property of The Week- Gayton Crescent
I'm always on the look out for something a little different, and Hampstead seems comes up trumps every time given that most of the architecture in the area is traditional/period. Someone has taken the brave step of converting three Ted Levy 1970's built houses and converted them into a substantial home with an abundance of space and light.
This interesting property is located on Gayton Crescent, just in between The Village and The Heath making for a desirable and convenient position. The volume of the rooms and the level of light in the house is striking and is uninterrupted with a minimal and uncluttered look.
There is some pretty serious technology built in to this place with Lutron lighting, electric blinds, integrated music and entertainment system that all works seamlessly and in harmony with the look and feel of this house- very cool, very contemporary and will date well. A combination that many homeowners rarely get right, as they often fall into the trap of over-personalising their homes, not so here.
On the market with TK International for £3,650,000 , Click on the link below for the full story .
http://www.zoopla.co.uk/for-sale/details/3816649
This interesting property is located on Gayton Crescent, just in between The Village and The Heath making for a desirable and convenient position. The volume of the rooms and the level of light in the house is striking and is uninterrupted with a minimal and uncluttered look.
There is some pretty serious technology built in to this place with Lutron lighting, electric blinds, integrated music and entertainment system that all works seamlessly and in harmony with the look and feel of this house- very cool, very contemporary and will date well. A combination that many homeowners rarely get right, as they often fall into the trap of over-personalising their homes, not so here.
On the market with TK International for £3,650,000 , Click on the link below for the full story .
http://www.zoopla.co.uk/for-sale/details/3816649
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.
Don't forget to visit the links below to view back dated deals and Hampstead Property News.
Thursday 24 September 2015
Finchley Road NW3- 1 bedroom flat - Investment purchase
Its been a couple of months since we last visited this part of Finchley Road, though this one bedroom second floor flat has come up that is not in need of much preparation. Located above commercial premises, its well situated for the transport and shops of West Hampstead, so handy for the commuter.
Wednesday 23 September 2015
Buy to let Investment Eton College Road NW3
Here's a simple one bedroom flat in this popular buy to let investment pocket of NW3 , which incidentally the majority of its flats let out to tenants. This block known as "The Etons" has all the practical benefits of being in a block with lift, day porter, unreserved parking and communal heating with hot water included. The location is ideal being just 30 meters from Chalk Farm Tube.
Tuesday 22 September 2015
Buy to let investment - Maitland Park Road NW3
Hello folks,
its back to the old stomping ground that is close to Chalk Farm tube and on the borders of Primrose Hill and Camden, making it an attractive and convenient location. Incidentally, this pocket of NW3, like the cluster of roads surrounding Hampstead Heath represent good value for the area and are the town's buy to let hot spots.
This two bedroom flat on offer in Maitland Park Road that is in a purpose built ex-local authority block has come up, and, in my humble opinion an attractive package. Offered in good all round condition, there are 2 bedrooms, separate kitchen/breakfast room, and access to the balcony from both there and the living room. There is some 730 sq ft of living space on offer so pretty generous proportions, which is typical of this style of property. Strong tenant demand for the area and these flats are good value, so they get snapped up pretty quickly. Your target audience is the graduates/sharers market making use of the location whilst climbing the career ladder.
Rent wise,this flat will realistically achieve £1690 per calendar month and after all expenses, that will give you a net yield of 4.5%-not bad for starters. Subsequent years will likely see an improvement on that figure as the investment matures.
On the market with our neighbours at Oliver's inviting offers of £425,000 or more
http://www.zoopla.co.uk/for-sale/details/36162961
Looking to invest in the NW3 area ? give me a call on 020 7435 0420 if you would like to chat more about the important things to consider or you can email me the link if there is a property that you have in mind to chris@ashmoreresidential.com
its back to the old stomping ground that is close to Chalk Farm tube and on the borders of Primrose Hill and Camden, making it an attractive and convenient location. Incidentally, this pocket of NW3, like the cluster of roads surrounding Hampstead Heath represent good value for the area and are the town's buy to let hot spots.
This two bedroom flat on offer in Maitland Park Road that is in a purpose built ex-local authority block has come up, and, in my humble opinion an attractive package. Offered in good all round condition, there are 2 bedrooms, separate kitchen/breakfast room, and access to the balcony from both there and the living room. There is some 730 sq ft of living space on offer so pretty generous proportions, which is typical of this style of property. Strong tenant demand for the area and these flats are good value, so they get snapped up pretty quickly. Your target audience is the graduates/sharers market making use of the location whilst climbing the career ladder.
Rent wise,this flat will realistically achieve £1690 per calendar month and after all expenses, that will give you a net yield of 4.5%-not bad for starters. Subsequent years will likely see an improvement on that figure as the investment matures.
On the market with our neighbours at Oliver's inviting offers of £425,000 or more
http://www.zoopla.co.uk/for-sale/details/36162961
Looking to invest in the NW3 area ? give me a call on 020 7435 0420 if you would like to chat more about the important things to consider or you can email me the link if there is a property that you have in mind to chris@ashmoreresidential.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.
Don't forget to visit the links below to view back dated deals and Hampstead Property News.
Follow The Buy-To-Let Property Investment Market in Hampstead
Hampstead Property Market LinkedIn Page
Ashmore Residential Hampstead Facebook Page
Ashmore Residential Hampstead Twitter Page
Hampstead Investment Property Specialist Ashmore Residential Website
Hampstead Property Market LinkedIn Page
Ashmore Residential Hampstead Facebook Page
Ashmore Residential Hampstead Twitter Page
Hampstead Investment Property Specialist Ashmore Residential Website
Monday 21 September 2015
Buy to let investment - 1 bedroom flat Agincourt Road NW3
Its the start of another week and the last few remaining flats with some outside space are on the market,just before the leaves start to fall and turn brown. This refurbished one bedroom flat on the ground floor caught my this morning that has a small section of outdoor space, ideal for a buy to let investment.
Friday 18 September 2015
Interest rates set to rise – How will that affect the Hampstead property market?
A couple of weeks ago, I mentioned in this blog about how
the Bank of England has been indicating recently that UK interest rates will be
going up in the not too distant future. Therefore, if you are one of the 10,836
homeowners in Hampstead, who own your own home with a mortgage,
then you need to consider your options and start to budget for an interest rate
rise. However, if you are a landlord, who owns one of the 21,066 rental
properties in the area, whilst your exposure to interest rate rises is lower, it
is most certainly something you should be aware of.
Since the spring of 2009, British interest rates have been at
a record low of 0.5% since they were first introduced some 400 years ago. It’s not a case of if, but when, they will
rise. Some people think it will be before Christmas, although I am of the
opinion, it will be early in the New Year around Easter time, when they do rise.
I also expect those rises will be slow, steady and limited. It depends on what happens to UK wage rises, UK inflation and the
general state of the British economy. Nevertheless, as much most of us in Hampstead
would love to pull the shutters and stick two fingers up to the world, we have
to recognise we are part of a global economy and global economic worries still
exist to prevent an abrupt and instantaneous rate rise.
Those Hampstead landlords, who do have a mortgage, need to
realise that as interest rates rise, their monthly mortgage costs rise. It’s
easy to say you will look at your mortgage next month, then before you know it,
Christmas will be here! Don’t forget,
mortgage lenders have always removed the juicy low rate mortgage deals a few
months before interest rate rise. Speak to a qualified mortgage arranger, there
are lots of them in Hampstead and seriously consider fixing your mortgage rate
now. You didn’t buy your Hampstead buy
to let property for it to become a millstone around your neck. It’s all about
mitigating your costs and maximising your income to make your Hampstead buy to
let property the investment you want it to be.
However, on the other side of the coin, two in three
landlords who have bought property since 2007, have done so without a mortgage.
A rise in interest rates might be a good thing. Let me give you some background
first, then I’ll explain why. Hampstead landlords have see their return on
investment for their Hampstead buy to let property, over the last couple of
years, perform very well indeed with Hampstead property values rising by 80.18%
since the Spring of 2009. However, when rates do rise, whilst more expensive
mortgage rates will ease the demand for borrowing, on the other hand, it may temper
house price growth, making the property market more competitive... and
therefore, we should see the return of some bargain property buys in Hampstead!
Finally though, can I ask all Hampstead homeowners and Hampstead landlords, who have a mortgage that isn’t fixed, they need to recognise that rates will rise throughout 2016 to 2018 and will continue to move steadily upwards towards more viable and feasible long term levels. I am not qualified to give that advice and this is my personal opinion, so please speak to a qualified mortgage arranger and, if appropriate, fix your mortgage before interest rates rise. Don’t say I didn’t warn you!
In the meantime, if you are a landlord looking for a bargain
now, don’t despair ... there are plenty out there, if you know where to look!
One place is Rightmove, another Zoopla and another OnTheMarket. However,
sometimes, you can’t see the wood for the trees. At the time of writing,
Rightmove had 438 properties for sale in Hampstead, Zoopla 535 properties for
sale in the area and OnTheMarket 399 properties ... where do you start? A lot
of savvy Hampstead landlords like to visit the Hampstead Property Blog www.NW3propertyblog.com where, irrespective of which agent is selling it,
I regularly post what I consider out of the hundreds of properties on the
market, to be the best buy to let deal in Hampstead.
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.
Don't forget to visit the links below to view back dated deals and Hampstead Property News.
NW3 Eye Candy- Property of the week - Downshire Hill NW3
This week I've been looking around for something that offers the elegance and grandeur of a by-gone era with a contemporary interior for modern 21st century living and came across this wonderful house on Downshire Hill. The road is highly sought after- very low turnover of houses here and the location is very desirable in between the Heath and The Village.
This house has been finished to a very high standard with an opulent and sumptuous feel to the interior that even Royalty would aspire to. There are 5/6 bedrooms a superb 50" kitchen/dining room leading to a warm and inviting sitting area , lift access to all floors, indoor swimming pool and staff quarters on the basement level.
Other goodies include state of the art music and lighting system and underfloor heating to the bathrooms. From the outside, there's secure parking for at least three cars, lawned gardens, terrace and a sunken patio- once your'e inside - you probably won't want to leave!
On the market with big house brokers TK International- get that cheque book out- its a big one ! how big ? try £14,500,000 click on the link below for a feast of the senses.
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.
Don't forget to visit the links below to view back dated deals and Hampstead Property News.
Thursday 17 September 2015
Buy to let 1 bedroom flat Mansfield Road NW3
I've been scouring the pocket of roads around the borders of Gospel Oak and The Heath,and for today, I've picked out this one bedroom flat located on Mansfield Road. Its on the top floor and has been renovated to a high standard throughout in a contemporary style with bright and neutral decor. This one has got some nice views too, there's normally a premium for that in most parts of town.
Wednesday 16 September 2015
1 bedroom flat on Adelaide Road NW3 - Buy to Let Investment
I've been looking through the offerings on the local market, this one bedroom flat has caught my eye and the offer here looks pretty good. A one bedroom flat in a block at the Swiss Cottage end of Adelaide Road with easy access to Primrose Hill and Regents Park make the location a desirable and convenient spot.
Tuesday 15 September 2015
Buy to let investment - Crayford House - Lawn Road NW3
We've had quite a cit of activity in this block over the past few weeks and this two bedroom flat in need of modernisation is my pick for today. Located on the 11th floor, thus 2 bedroom flat has a balcony leading from the reception room with south westerly views across London , 2 good size bedrooms and kitchen/breakfast room to boot.
Friday 11 September 2015
Crisis in the Hampstead Property Market ..probably?
I don’t know about you, but if you watch Sky News every
waking hour or read the newspapers, it always seems we as a Country, Europe or
the World seem to lurch from one crisis to another. Another week, another crisis
averted. It was only last summer the soothsayers were predicting the end of the
world over the supposed house price bubble that many believed was developing in
the South.
Property prices were rising at 20%+ per annum in London, only for
things to ease as the property market in the Capital showed a controlled
slowdown and cooling in activity with price growth easing to a more realistic
8% to 9% per annum. Interestingly, there was no panic when some modest price
drops were seen in some of London’s highest priced suburbs.
However, this month’s crisis is the buy to let boom and as
George Osborne always likes to be topical, in the July emergency budget, he declared
that he will start to scale back, from 2017, the tax relief that those high
income tax rate landlords with a mortgage have benefited from. The Daily Mail ran
headlines stating it was the end of the private landlord; predicting many
landlords will give up on buy to let altogether and we will be inundated with rental
properties up for sale as landlords feel squeezed from the market.
Even Mr Carney, the Governor of the Bank of England,
recently cautioned that the buy to let property market could destabilise the
whole UK property market. He was concerned landlords who bought with high loan
to value mortgages could be spooked if there is a property crash, they would panic
because of negative equity, sell cheaply, which would worsen house price falls.
End of the world then?
.. this week, yes probably, but next week .. that’s another story! Before we all go and live like a hermit in
the Scottish highlands, let me explain to you my perspective on the whole
subject. As I mentioned a few weeks ago, two thirds of buy to let properties
bought in the last eight years have been bought mortgage free – so they won’t
be affected by the Chancellors’ tax changes. Also, something I feel is often overlooked but
very important, is the fact that landlords historically have only been able to
normally borrow up to 75% of the value of the rental property. In the last property crash of 2008, property
values dropped by the not so insignificant figure of 15.19% in Hampstead, but
even then, when we had the credit crunch and the world’s banking sector was on
the brink, no landlord would have been in negative equity in Hampstead.
I believe we have a case of ‘bad news selling newspapers’
and I believe that buy to let, and the property market as a whole, will carry
on relatively intact. It’s true reducing tax relief will hit landlords who pay
the higher rate of income tax and this may slightly diminish buy to let as an
investment vehicle, but I doubt people will sell. Many landlords have been lazy
with their investments, buying with their heart, not their head. You would
never dream of investing in the stock market without doing your homework and
talking to people in the know. If you want to make money in the Hampstead
property market as a buy to let landlord, it’s all about having the right
property and as you grow, the right portfolio mix to offer a balanced
investment that will give you both yield and capital growth.
The Hampstead buy to let market still offers good investment
opportunities to new and old alike. Those who have bought in the last twelve to
eighteen months have reaped the benefit from buying in Hampstead, because the borough
offered a combination of reasonable house prices with subsequently increasing
rents. Property values have risen by 13.33% in the last eighteen months in Hampstead,
whilst looking at rents, in Q2 2015, average rental values for new tenancies
were 10.1% higher than Q2 2014, and they rose by 9.4% between Q2 2013 and Q2
2014.
I cannot stress enough the importance of doing your homework.
One source of information and advice is the Hampstead Property Blog where I
have similar articles to this about the Hampstead property market and what I
consider to be the best buy to let deals around at anyone time in the City,
irrespective of which agent it is on the market with. If you haven’t visited
and you are interested in the local property market in Hampstead .. you are
missing out! .......... 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.
Don't forget to visit the links below to view back dated deals and Hampstead Property News.
Follow The Buy-To-Let Property Investment Market in Hampstead
Hampstead Property Market LinkedIn Page
Ashmore Residential Hampstead Facebook Page
Ashmore Residential Hampstead Twitter Page
Hampstead Investment Property Specialist Ashmore Residential Website
Hampstead Property Market LinkedIn Page
Ashmore Residential Hampstead Facebook Page
Ashmore Residential Hampstead Twitter Page
Hampstead Investment Property Specialist Ashmore Residential Website
NW3 Eye Candy- Property of The Week - Westover Hill NW3
This weeks pick is a contemporary house on Westover Hill which is discreetly located off West Heath Road. This house has six bedrooms, a large garage that will accommodate 2 cars, 5 further bathrooms and three bathrooms. At the entrance level , the house has a superb integrated kitchen with all the expected machines and beautifully crafted wall and base units.
The house has a modern feel throughout, though there is great attention to detail here with the materials and colour schemes complementing each other without compromising on quality. On the ground floor there are 4 reception rooms, offering formal dining areas and living/entertaining space. If your feeling sporty, there's an indoor swimming pool and a gym, you can relax with a drink afterwards in the Cinema room and watch your favourite film. With over 5000 sq ft of living space on offer,this house is a wonderful playground with much to enjoy from every room.
This house has a quiet residential location and the amount of space on offer make it ideally suited to the growing family and for those who entertain at home frequently.The superb amenities make it ideal for modern 21st century living offering all all that you would aspire to.On the market with big house brokers Bargets for £5.95 million , click on the link below for more eye candy!
http://www.zoopla.co.uk/for-sale/details/36430722
The house has a modern feel throughout, though there is great attention to detail here with the materials and colour schemes complementing each other without compromising on quality. On the ground floor there are 4 reception rooms, offering formal dining areas and living/entertaining space. If your feeling sporty, there's an indoor swimming pool and a gym, you can relax with a drink afterwards in the Cinema room and watch your favourite film. With over 5000 sq ft of living space on offer,this house is a wonderful playground with much to enjoy from every room.
This house has a quiet residential location and the amount of space on offer make it ideally suited to the growing family and for those who entertain at home frequently.The superb amenities make it ideal for modern 21st century living offering all all that you would aspire to.On the market with big house brokers Bargets for £5.95 million , click on the link below for more eye candy!
http://www.zoopla.co.uk/for-sale/details/36430722
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.
Don't forget to visit the links below to view back dated deals and Hampstead Property News.
Thursday 10 September 2015
2 bedroom flat Buy to Let investment- Crayford House , Lawn Road NW3
For today, I've picked out another 2 bedroom flat in this block located on Lawn Road. This flat is in a well kept ex-local authority block on Lawn Road, close to Hampstead Heath and Belsize Park tube. There are well maintained communal gardens, so the block has kerb appeal when you pull up outside and being on the 11th floor there are some great views on offer too.
Wednesday 9 September 2015
Investment opportunity - Agincourt Road NW3
Back to the Mansfield Conservation area today which is just round the corner from The Heath and this two bedroom ion Agincourt Road caught my eye. Location is pretty handy being a short walk to Hampstead Heath mainline station, The Heath, all the shops on South End Road and just 5 minutes to the tube at Belsize Park.
Tuesday 8 September 2015
Buy to let Investment - Provost Court Eton Road NW3
The pocket of roads around Chalk Farm tube are the current buy to let hot spots in the NW3 area. For today, I've picked out this one bedroom flat in Provost Court, Eton Road, just a moments walk to Chalk Farm tube, Primrose Hill Village and local shops on Haverstock Hill.
Friday 4 September 2015
George Osborne – The Hampstead landlord’s friend?
Well the last few weeks has been rather hectic as Hampstead
landlords, some who use us to manage their properties and other landlords who
just read our Hampstead Property Blog, have been sending me emails or picking
the phone up to me about the new rules on buy to let taxation announced in the
recent budget. George Osborne confirmed in the recent
summer budget that the tax relief given
to landlords on mortgage interest payments, on their buy to let (BTL) properties,
would be reduced over the coming years for higher rate income tax payers. The
Chancellor said the tax relief that private buy to let landlords (who pay the
higher rate of income tax) would change in 2017 from the current 45%/40% and
would steadily reduce over the following four years to the existing 20% by
2020.
With 36.1% of residential property in the Westminster
Parliamentary Constituency of Hampstead and Kilburn being privately rented (as
there are 21,066 privately rented properties in the area), these changes are
potentially something that will not only affect most Hampstead landlords, but
also the tenants and the wider property market as a whole. The choice of rental
properties could drop, especially at the top end of the market which could push
up rents.
However, Hampstead
landlords could protect themselves by reassigning one or more rental
properties into a company structure (e.g., a Limited Company, Partnership or
Sole Trader) and by doing so, the total tax paid is greatly reduced, because a
company only pays tax on the profit. Nonetheless, before everyone goes off
setting up companies for their BTL portfolios, it must also be noted, if a sole
trader firm is started, stamp duty needs to be paid, yet if the owner is in
business with a partner, they could enjoy some stamp duty relief. The biggest tax variation is Capital Gains Tax
(CGT) where the tax bill will be much higher when you come to sell your
portfolio. In essence, by going into business with your BTL properties, you
will potentially have a modest stamp duty to pay when you start, but you will
have a lot less monthly tax to pay, irrespective of the interest rate, but the
CGT bill will be much higher when you come to sell ... as you can see, it is
not a ‘get out of jail card’. Now it must be remembered, I am not a tax
advisor, so you must take advice from a qualified person (more of that later).
Those
planning to purchase a BTL property will have to factor these new rules into
their calculations, and this could affect the offers they are willing to make.
However, I am not that concerned, as the scaremonger reports fail to see the
fact that two out of three BTL properties that have been bought since 2007 have
been purchased without the support of BTL mortgage. With those two thirds of
landlords paying cash for the purchase of their rental properties, that means
two thirds of landlords will be totally unaffected by the changes.
So what of the future? The British love their Bricks and
Mortar, it’s an asset that they can touch and feel and has a 70 year track
record of capital growth that has out stripped inflation. Buy to let will still
be attractive to Hampstead investors and let me explain why. If you invested £125,000
in Hampstead property in September 1987, today it would be worth £620,528. If
you had invested the same £125,000 in to the London Stock Market (the FTSE 100
to be exact), it would be only be worth £357,831 today, whilst Inflation would
have taken the original £125,000 and pushed it up to£259,771.
It’s true some central London landlords relying solely on
the tax breaks rather than high yields may be forced out of the market, but
even those landlords could seek to recoup any losses by increasing rents. However,
those landlords may leave the market and this could constrict the availability
of rented houses even more than it is already, increasing rents and thus pushing
yields even higher for landlords and BTL investors still in the market... thus
attracting new landlords into the market because of those higher yields.
The reality is, there is too much demand and not enough
supply of homes for people to live in in the area. Official figures show the
population in Hampstead and Kilburn is rising by 1,519 persons per year (i.e.,
demand rising), but only 432 properties are being built each year (i.e., supply
is low). This sets up the Hampstead (and UK) property market to continue to
create strong and steady returns, irrespective of any tax loophole being
there (or not as the case maybe).
If the demand is there, I am happy
to organise an informal seminar with a local Hampstead accountant one evening, whereby
they can show you the options available and what might be best for you.
Therefore, if you are interested in attending, please drop me an email chris@ashmoreresidential.com and we will be able
to get something organised very soon.
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.
Don't forget to visit the links below to view back dated deals and Hampstead Property News.
Wednesday 2 September 2015
3 bedroom flat on Maitland Park Villas with 4% net yield
Back to this popular corner of NW3 which has become popular buy to let territory. This three bedroom flat has come to the market and has double glazing, gas central heating and a decent size balcony off the living room.
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