As my regular readers know, my passion is talking about Hampstead
property. As a property agent I like to comment on the Hampstead property
market, which I hope will be of interest to both homeowners and buy to let
landlords alike. However, this week, I want to highlight the plight of the tenants
of Hampstead as more and more of their wages are being taken up by ever
increasing rents.
The cost of renting a home in Hampstead has broken through
the £2,000 a month barrier as the average rent for a property in the suburb,
now stands at £2,150 per month, a rise of 1.4% last month, leaving rents for
new lets 8.2% higher than they were 12 months ago.
House price inflation has certainly eased in Hampstead from
the heady days of 2014, but still with retail price inflation (for goods and
services) reducing to 0% any increase in property values, no matter how small,
means in real terms property is still getting more expensive. Meanwhile, many
tenants have given up saving for a mortgage deposit as rents continue to take more
and more of their wage packets leaving nothing to save for a deposit. That
means, more and more tenants are deciding to rent for the long term and
therefore the desire for decent high quality rental properties continues to exceed
the available rental stock.
I would go as far as to suggest that rents are an ideal
barometer to the state of the local economy as a whole and strongly believe that
the recent increase in Hampstead rents are a sign that the Hampstead economy is
picking up.
This means Hampstead landlords are continuing to capitalise
on the local property market. The most recent Land Registry data suggests the
annual property price rises in the suburb have eased over 2015, leaving
property values only 5.77% higher than 12 months ago, so as property price
growth is easing off, with the increased rents, rental yields are strengthening
for the first time in years to compensate. The mortgage market has become more
stable after the mad months of May and June after the Tory’s got back into
No.10, and so, everything is set to be good news for landlords; even with the
Chancellors change of tax rules in the coming years for buy to let mortgages.
You can get some amazingly low mortgage rate deals at the
moment, so with mortgage rates so low and returns still extraordinarily attractive,
there’s rarely been a better time to invest in rental properties.
However, (you knew there would be a however!), it’s all
about buying the right property at the right price. Not all property types are
seeing equal rises in rents and capital growth.
Different parts of the suburb, different types of properties are
experiencing quite different changes.
For example, the average length of time the 728 Hampstead properties up
for rent between £1000 to £2000 per month is 26 days, whilst the average length
of time the 794 properties at £2000 to £5000 per month is 58 days and 318
properties that fall into the over £5000 per month price bracket is an eye watering
153 days.
When you start comparing different parts of Hampstead, the
numbers are even stranger! The bottom
line is that you must take advice and opinion. One source of advice and opinion
is the Hampstead Property Blog. In the Hampstead Property Blog, you will see
many more articles like this, discussions and even what I consider to be the
best buy to let deals around, irrespective of which agent is selling it.
Whether you are a landlord, ‘Homes Under the Hammer’ addict
or just a homeowner who is interested in what is happening to the local
property market, then please visit the Hampstead 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.
Don't forget to visit the links below to view back dated deals and Hampstead Property News.
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