Hampstead’s
continuing housing shortage is
putting the town's (and the Country’s) repute as a nation of homeowners
‘under threat’, as the number of houses being built continues to be woefully
inadequate in meeting the ever demanding needs of the growing population in the
town. In fact, I was talking to some friends the
other day at an evening dinner together; the subject of the Hampstead Property
market came up in the conversation (as I am sure it does at many parties in Hampstead)
after the weather and politics. My friends said it used to be that if you went out to work and did
the right thing, you would expect that relatively quickly over the course of
your career you would be buying a house, you would go on holiday every year, and
you would save for a
pension. However, over recent years, things seem to have changed.
Back in the Autumn, George
Osborne, used the Autumn Statement to double the housing budget to £2bn a year from April 2018 in an
attempt to increase supply and deliver 100,000 new homes each year until
2020. The Chancellor also introduced a series of initiatives
to help get first time buyers on the housing ladder, including the contentious
Help to Buy Scheme and extending Right to Buy from not just Council tenants,
but to Housing Association tenants as well.
Now that does
all sound rather good, but the Country is only building 137,490 properties a
year (split down 114,250 built by private builders, 21,560 built by Housing
Associations and and a paltry 1,680 council houses). If you look at the graph (courtesy of ONS),
you will see nationally, the last time the country was building 230,000 houses
a year was in the 1960’s.
How George is
going to almost double house building overnight, I don’t know, because using
the analogy of a greengrocers; if people want to buy more apples (i.e. houses) in a greengrocers’ shop,
giving them more money (i.e. with the
Help to Buy scheme) when there's not enough apples in the first place
doesn't really help.
Looking at
the Hampstead house building figures, in the local authority area as a whole,
only 350 properties were built in the last 12 months, split down into 330
privately built properties, 10 housing association and 10 local authority being
built. This is simply not enough and the shortage of supply has
meant Hampstead property values have continued to rise, meaning they are 6.3%
higher than 12 months ago, rising 0.9% in the last month alone.
At school
(all those years ago!), I was taught that this economics game is all about
supply and demand. The demand for Hampstead property has been particularly strong
for properties in the good areas of the town and it is my considered opinion
that it is likely to continue this year, driven by growing demand among buyers
(both Hampstead homebuyers and Hampstead property owners alike). You see Hampstead’s
economy is quite varied, meaning
activity is expected to remain relatively strong into the early Summer of 2016,
especially as some Hampstead buy to let landlords try to complete purchases
ahead of the introduction of new stamp duty rules in April.
Moreover,
of supply, well we have spoken about the lack of new building in the town
holding things back, but there is another issue relating to supply. Of the
existing properties already built, the concern is the number of properties on
the market and for sale. The number of properties for sale last month
in Hampstead was 822, whilst two and a half years ago, that figure was 900, and
just over four years ago it stood at 990… quite a drop!
With demand
for Hampstead property rising, minimal new homes being built and less
properties coming onto the market, that can only mean one thing ... now is a
good time to be a homeowner or landlord in Hampstead. For
more articles like this, 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.
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