Following last week’s article, I
had an interesting chat with a chap who lives in St. John’s Wood, who popped
into our office on Heath Street in Hampstead, whilst his better half was at the
hair salon. He is thinking of buying his first buy to let property and he
wanted my opinion on the state of the market and if it was a good time to
invest. He was particularly worried that with all the newspaper headlines of
the Stamp Duty and other changes to the taxation rules. One of the best pieces
of advice I can give to those looking to invest in property is a simple trick
of the trade. You can judge the affordability of an area’s property market (and
thus how much demand there could be) by simply finding the ratio of the average
property price to the average salary. The lower the ratio, the more affordable
property is.
When we put this to the test, as we talked about a few weeks ago, we found that Hampstead currently has an average property value of around £1,493,815. The average salary of someone living in Hampstead is £53,295. This is a ratio of 27.70 to 1. Most lenders will only lend up to 3 times combined income, so to buy an average house in Hampstead, a first time buyer would need to be on a joint salary of £319, 770 and even then, would need to raise the 5% deposit, which when you take into account buying fees, including Stamp Duty, will be in the order of £165,000.
Tenants’ inability to raise that
sort of money for the deposit is driving demand for rental property, If you
would like some advice about buying to let, be you a landlord with a portfolio
or someone thinking of investing in the rental market for the first time,
please pop in and see me at our office on Heath Street, 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.
No comments:
Post a Comment