You find me in a
reflective mood today as I want to talk about the future of investing in
property in Hampstead. The truth is that we have got fat and lethargic, with
many people having mistaken the ever rising Hampstead (and in fact the whole of
the UK) property market since the 1960’s as the eternal gift that kept giving
as property prices constantly rose and doubled every five to seven years.
The days of making money from property
as easy
as falling off a log, like taking candy
from a baby are sadly
over my Hampstead Property Blog reading
friends
Whilst the current
Chancellor, Philip Hammond is carrying out the policies rolled out by his
predecessor, it was decided that now is the time to milk the ‘Golden Cow’ of
UK’s private landlords. With changes in taxation for buy to let property, many
pundits are predicting the end of buy to let as we know it. However, it is still possible to make a reasonable, profitable
and safe return on property with these changes. You see, I have always seen
investing in the Hampstead buy to let market (as I would anywhere in the UK),
as I might see mother nature, creating some truly wonderful stunning warm
weather but at the same time, she will bite, creating catastrophic situations
such as snowstorms and hurricanes. You need to study the market, take advice
and opinions from many people and then decide what the proverbial property
weather will be … remember, tenants will always want a roof over their head and
I don’t see the HM Government building the millions of houses required to house
them.
Nobody knows the future,
and yes people can predict but I wouldn’t be afraid of this change .. because
as a famous French proverb says, (I told you I was a reflective mood today), ‘the
more things change, the more they stay the same’. I mean, who could have predicted how the
property market has changed in Hampstead over the last couple of decades?
Looking specifically at what was Hampstead and Highgate but is now the
Hampstead and Kilburn Parliamentary Constituency, twenty years ago, 18,405
households (meaning 39.85% of property) was owned and only 2,940 households
were privately rented (meaning 6.37% of property was rented out by private
landlords). Roll the clocks on twenty years and the change has been seismic ….
Now 18,096 of properties in the Constituency are home-owners (a drop to only
38.17% being owner occupied) and the jump in private renting has been out of
this world, as 21,066 properties are now privately rented, proportionally 45.6%).
(NB Neighbouring Constituencies show similar changes as well).
(Source~ Office of National Statistics- ONS)
Also, if you had asked
someone in 1996 to predict what would happen to property values over the
proceeding 20 years (ie between 1996 and 2016), they might have
predicted similar growth to the growth experienced over the previous 20 years (ie
between 1976 and 1996), which was a very impressive 351.55%. Yes, property
values in Hampstead have increased over the last 20 years (between 1996 and
2016), by an even more impressive 609.3% (and most of that can be attributed to
house price growth between 2000 and 2007.)
See the graph below that illustrates this trend.
The property market is
constantly changing and buy to let for too long has been heavily dependent
solely on house price growth, where yield has been almost forgotten. I see the
changes in tax and landlord and tenant law in a different perspective to the
doom-mongers and see it as bringing many opportunities. You might need to
change your buy-to-let benchmarks, your approach to financing or even consider
places other than Hampstead in which to invest your money. This will shine a
light on investing in properties with healthier yields and create more
realistic long term buy to let opportunities, instead of short term growth bets
and wagers.
The
advice I give to my landlords, and you my blog reading friends is this; these
changes will make some landlords panic, meaning competition for decent
Hampstead buy to let bargains will reduce as fear of change kicks in and
amateur investors flee the market. These opportunities will provide a more
stable platform for knowledgeable and wise Hampstead buy to let landlords to
thrive in.
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If you are looking for an agent with experience that can help you find the right tenant for your property, then contact me 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 at Ashmore Residential, Suite 7, 25-27 Heath Street, London, NW3 6TR. There is plenty of parking and the kettle is always on.
If you are looking for an agent with experience that can help you find the right tenant for your property, then contact me 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 at Ashmore Residential, Suite 7, 25-27 Heath Street, London, NW3 6TR. There is plenty of parking and the kettle is always on.
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