Property values in Hampstead rose
by only 0.5% in March. This follows a quarter of sluggish activity in the Hampstead
property market in the run up to the EU referendum, putting the average price
of a property in Hampstead at £1,622 ,982 10.6 % higher than in March 2015.
Interestingly, the Council of
Mortgage Lenders and Estate Agent trade bodies over the last few months have reported
seeing a fall in mortgage lending and enquiries from prospective homebuyers. This
is important because it comes amid an overall fall in housing market activity
in Hampstead. Data from the Land Registry said completed house sales in Hampstead
in the three months to January 2016, (the most up-to-date figures available)
fell by 32.91% compared to the same three month period up to January 2015
However, I believe that the
slowdown in property sales in Hampstead is supporting Hampstead property values,
as there is a shortage of houses coming onto the market. Even though in the
whole of the first Quarter of 2016, Hampstead property value increases may seem
subdued when compared to 2015, let us remember, property values are still
rising well above the level of inflation.
As I have said many times before,
the population in Hampstead is growing at a much higher rate than the number of
properties being built. This increasing demand for a roof over people’s head,
which is outpacing the supply of new houses being built in Hampstead, is creating
a severe imbalance in the Hampstead (in fact the whole of UK’s) housing market,
thus making homeownership an ever increasingly distant dream for many of Hampstead’s
potential first time buyers.
In fact, I still maintain the
view that house prices are likely to rise by around 3 to 5% in Hampstead in
2016, even after taking into account this blip at start of the year and the
outcome of the EU Referendum. This has been the hot topic of late and the
rumour mill is churning out stories of a slump in the UK housing market by an
average of 18% and that the UK Economy will slip back in to recession should
the majority vote be for the leave campaign. It’s true that much hinges on Brexit,
politically and economically, with prominent politicians and captains of
industry all firmly in the remain camp, which in my humble opinion, makes the
prospect of Britain leaving the EU unlikely.
My reasoning is that the predicted
rise reflects both strong economic conditions and steady market conditions with
(and this is the most important factor) very low numbers of properties on the
market.
Many Buy to Let landlords know
that investing in the Hampstead property market is a long-term strategy of 10,
20 even 30 years. Governments come and go, but unless Camden London Borough Council
start to build hundreds of new properties a year to make up for the shocking lack
of supply, Hampstead people will always want a roof over their head, and
irrespective of which party is in power, if there aren’t any council houses and
they can’t (or are unable to buy), a demand for rental properties will always
remain. The Chancellor’s raid on the buy to let landlord piggy bank with the
rise in SDLT (Stamp Duty Land Tax) may have dampened the enthusiasm of some, though
larger investors with greater resource available to them are negotiating harder
on price as a result of the hike in duty.
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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