As you are all aware the London property market and has been subjected to its fair share of adverse press commentary in the past 12-18 months. In the financial news there was the usual yearly round up and as the UK economy and its housing market are inextricably liked there were generous air time and column inches devoted to the future of the British housing market. Following on from that, here is my forecast for Hampstead in 2018.
Mortgage interest rates are
very low, despite the slight increase of 0.25% by the Bank of England. For example,
the average 5-year fixed rate mortgage at 1.98% (down from 3.47% in 2014) and
2-year fixed rate at 1.47% (down from 2.37% in 2014. From an area perspective. The
Hampstead and Kilburn ward has low level unemployment of just 3.4 % making for
a stable local economy. The recent figures show that only 519 properties were
sold in 2017, this restriction of supply has put an upward pressure on prices
meaning Hampstead property values are 2.1% higher than a year ago.
In 2018, the biggest concern is
raising inflation that has reached 3.1%, the highest in 6 years. This is continuing
the squeeze on household budgets with wages not having risen by as much in real
terms. Looking through the data for the number of properties listed there were
no less than 240 flats and houses with price reductions throughout 2017. Much of
this could be down to optimistic expectations of house sellers at the time of
listing.
The political and economic headwinds
of the past 12-18 months will continue to dominate the headlines in 2018.How
this will affect Hampstead house prices will depend on the outcome of the
Brexit negotiations and the impact they will have on the UK economy as a whole.
This and the Stamp Duty revisions have subdued activity in the local market. Throughout
2017, the weaker pound saw a high level of interest from overseas buyers in
Central London, enabling them to acquire certain homes and investments at a
discount. However, if the UK gets a poor Brexit deal, the finance and banking
sectors will be affected and that will have a significant impact on the London
market.
My message to all Hampstead
home owners and landlords is to keep a close eye on the Central London market
because what happens there has an effect on the region as whole, but not to
panic if prices suddenly fall. Since 2007 the Central London property market has
seen house prices grow by 77% as where in Hampstead they have increased only by
51.1 %. A heavy correction in Central London will have a ripple effect to the
suburbs, albeit more subdued.
Hindsight is better than
foresight and economic predictions are all well and good when you know what’s
round the corner. The Brexit negotiations currently underpin the political and economic
landscape; the outcome shall determine which direction the economy and housing
market take. In truth, none of us know
what Brexit will actually look like so it’s a case “wait and see”.
So, what’s in store for
Hampstead house prices over the next 12 months? I believe they will end up between
1% -1.5% and it will be a bumpy ride on the way.
If you want to know more about
my thoughts on the Hampstead Property Market, visit the Hampstead property blog
www.nw3propertyblog.com
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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 8366 9777.
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