Even with the General Election on the horizon, property
values in Hampstead are still 1.41% higher than they were 3 months ago. The diversion and ambiguity of an election
typically makes house sellers who need to sell, price their property more realistically
(although this only lasts a couple of months). Looking specifically at it from
a Hampstead landlord’s point of view, the Hampstead properties favoured by investors
are in short supply in many parts of the suburb because of a number of factors.
One of the factors has been that we have seen the number of second time buyers
coming to purchase their next home decrease over the last 12 months in Hampstead. Another factor has been the fact that banks
have been pushing ‘let to buy’ (yes ‘let to buy’ is different to ’buy to let’) to
homeowners (more of ‘let to buy’ in an up and coming article). Next,
because the banks who are chasing low risk landlords with high deposits
with very low mortgage rates- and the low risk landlords with high deposits
tend to be attracted to the safer modern two and three bedroom apartments and
town houses in Hampstead.
As I mentioned a while ago, the change in the Pension rules means buy
to let landlords can use some, or all, of their pension pot to buy a
property. It shouldn’t be forgotten
there are tax implications taking more than a quarter of your pension pot out
(see the article from a couple of weeks ago) , so whilst many pension pots may
not be able fund a suitably big enough tax free lump sum to buy the property
outright, for most it will provide enough for the 25% deposit (required by most
BTL mortgage providers). As a reminder to landlords, the interest paid on the
mortgage against your tax liability is going to be cut back to 20% from 2017 to
2020.
In the last 12 months, I have noticed a particular uplift in interest from ‘50
something’ Hampstead people wanting to become landlords for the first time. In Hampstead,
the highest returns for the lowest investment are at the lower end of the
market, that is studio, one and some two bedroom flats . Unfortunately, flats with
one bedroom are coming to the market in smaller numbers than the larger four
bedroom properties in top end sector of the Hampstead property market. When
looking at the actual numbers, in the later part of the Summer of 2016 in Hampstead,
in one month alone 67 one bed apartments were on the market. However, in January this year, a notoriously excellent bumper month for
properties coming on to the market, there were only 51 one bed apartments on
the market to choose from. Today, that figure stands at only 27..whilst
the number of four and five beds has increased significantly ... interesting don’t you think?
See the graph below with the latest figures from the Land Registry
At that lower end of the property market in Hampstead, (ie
where first time buyers and landlord investors compete with each other to buy
those smaller properties), I believe throughout 2017, there will be a slow and
steady tipping of the scales between supply and demand. In fact, from what I am
seeing and hearing, early anecdotal evidence has suggested over the last few
months (although we will need to look at figures later in the Summer once we
have the data from The Land Registry), we are beginning to see a polarised Hampstead
property market. We will have high demand but low supply at the bottom end of
the local market, yet high supply but lower demand at the top end... and
that can only mean one thing ... prices will go up quicker on the smaller
properties than the larger ones thus narrowing the gap for people looking to
move up market.
How Much Is Your Property Worth? Click Here To Find Out For FREE
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.
Don't forget to visit the links below to view back dated deals and Hampstead Property News.
Website, http://www.ashmoreresidential.com/
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