After the sudden announcement of the Conservatives for a
snap General Election. Modern political wisdom has urged caution on Prime
Ministers calling early elections with the last one being in 1974, under the
leadership of Ted Heath. Some 43 years later, the world is a
different place, Prime Minister, Theresa May is keen to get the mandate
from the British Electorate, largely driven by the main political issue that is
Brexit. Such potential issues and
possible uncertainties haven’t lifted the cloud from the Hampstead property
market. When an amalgamation of tougher lending conditions, Stamp Duty hikes and a correction in average values, political
uncertainty ahead of a General Election slows demand as we saw back in 2015
when David Cameron was elected.
Against the back drop of several changes to the property market with Stamp Duty revisions, Right to Rent Checks and changes in
Taxation Rules that came in only last month, some Hampstead buy to
let landlords were waiting to see how these new policies would be implemented
before they committed themselves to buying more property for their portfolio.
So, where next for the Hampstead property market? Well, according to the latest figures
released by the Office of National Statistics (ONS), inflation is at 2.3 %,
it’s been steadily increasing since 2015. The Bank of England has no reason to
raise interest rates for now, they are at a historic low of just
0.25%. As mortgage rates are at their lowest levels, landlords with large
deposits will now be wooed by the mortgage companies with their low rates.
You see, over the past couple of years, Hampstead landlords
have benefitted from a booming local job market. Unemployment in Hampstead and Kilburn has
dropped to 1.8 % of its population as a year ago, 1810 people were
claiming unemployment benefit compared to today’s 1,720- Source Office of National Statistics (ONS)
With more jobs and
better pay, as the level of rents is directly linked to tenant’s wages, there
has been an increase in the rental prices tenants paid in the past 2 years. This has now started to
bottom out as there is a surplus of rental property available since last year with many tenants moving their focus away from London.
Some landlords might be nervous about the Tory’s plans for the
housing market over the next five years in terms of tenant demand for their rental
properties.One plan is for Housing Association tenants to have the right to
buy their property. These kind of tenants were never in the private rented
sector and will actually increase the supply of properties in the housing stock
in decades to come. The Government ‘Help to Buy Scheme’ has only helped to buy one
Hampstead property since April 2013. Considering 612 properties have changed hands in the last
year alone in Hampstead, a fall of 10.5%, I don’t think it has made
a huge difference to our local property market.
Source- Land Registry
The
biggest matter, when it comes to tenant demand of rental property going
forward, comes from the shift in the mindset and attitudes towards renting
itself. Twenty years ago you were seen as a second class citizen if you rented
a property. In Hampstead, as in the rest of the UK (apart from Central London
areas of Marylebone and Mayfair), renting continues to offer good value for
money for tenants. If you are an existing landlord in Hampstead or
thinking of becoming one (or as we like to call you ... a FTL
... a ‘first time landlord’), then I must suggest you seek out
specialist advice and opinion.
Like many agents in Hampstead , we will happily give you our opinion on the
current state of the market and the
advantages/disadvantages to investing in the Hampstead property market if you pop into our offices.
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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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