Sealed bids battle in Hampstead- Useful or Outdated?

So here’s the scenario, there is a popular property on a sought after road and there has been lots of interest generated and as a result an open house has been arranged. There have been lots of offers coming in and the owner is advised to use the process of a sealed bid, however, offers related to a property do not generally come with a loving kiss!

Sealed bids are a useful tool to be used at times when demand significantly exceeds supply, especially when it is that ‘special’ property.

Agents don’t only use sealed bids for high value properties, it’s a method of sale used in all price brackets.  However, in my view it’s an outdated system one where it should be more formalised, restructured and transparent.  If you have been fortunate or unfortunate enough to be in the sealed bids group its a little “cloak and dagger” and your fate is decided by strangers.  Nevertheless, buyers should have to prove in advance of making their bid  (primarily sellers are most concerned with this aspect of the transaction), how ‘proceedable’ are the buyers, for example, is the sale going through to completion.  

So here’s the scenario, there is a popular property on a sought after road and there has been lots of interest generated and as a result an open house has been arranged. There have been lots of offers coming in and the owner is advised to use the process of a sealed bid, however, offers related to a property do not generally come with a loving kiss!

Sealed bids are a useful tool to be used at times when demand significantly exceeds supply, especially when it is that ‘special’ property.

Agents don’t only use sealed bids for high value properties, it’s a method of sale used in all price brackets.  However, in my view it’s an outdated system one where it should be more formalised, restructured and transparent.  If you have been fortunate or unfortunate enough to be in the sealed bids group its a little “cloak and dagger” and your fate is decided by strangers.  Nevertheless, buyers should have to prove in advance of making their bid  (primarily sellers are most concerned with this aspect of the transaction), how ‘proceedable’ are the buyers, for example, is the sale going through to completion. 

Preparing for the ‘sealed bid’ process

From the conception of looking at properties and going to view that special one we dreamed about, can feel like an emotional rollercoaster, perhaps we envisage sitting at the kitchen table reaping the benefits of all our hard work but the reality is quite a long way from that picture.    To get the ball rolling it’s probably best to get the vendor to accept an offer before it goes down the sealed bids process.  That’s why it is essential to have all the relevant information ready. 

However here are some thoughts about how to navigate through the sealed bids process.

·        In my own experience we, (my wife and I) acted quickly and found out from the agent as much as we could about the seller.  We met with the vendor as we did not want to become a number on the piece of paper.  One of the vendors criteria for selling the property was for a family to move in.  This is where he raised his family and this was an important factor for him to pass on a family home in a family orientated area.  Subsequently, the crux of the story was we were prepared to wait (quite a long time) this was crucial in the process of buying the property.  All these factors have to be kept in mind so preliminary investigations are crucial.  

·        Submitting the highest bid won’t necessarily secure the property for the eager purchaser. The prospective buyer is asked to submit their ‘best and final’ bid in writing, all offers are considered by the vendor and agent, with all the information gathered, a decision is then made.But, at this stage because it is not a legally binding decision on either parties, seller or buyer if someone else comes along with a bigger wallet then it’s all change.  If you require a mortgage, provide a copy of your ‘agreement in principle’  - if you have a property to sell provide the status of the sale or if you are buying the property in cash, then proof of the funds will greatly help.

·        Offering an unusual number means that no one else will be offering the same amount and it shows that you have given this matter much thought.  Try not to get caught up in the romance of it all and offering above what you can afford is not viable, offering the highest you feel most comfortable with is the most feasible, after all the highest bid doesn’t necessarily secure the deal.

Fundamentally, we know that buying a home is the biggest financial purchase of our lives and we have to get it right.  It’s human nature to be emotionally involved and hopefully reading some of the tips above will help prepare you if you find yourself in such a situation.

Guidelines for vendors:

·        How soon can they move?  Do the buyers timings fit with yours and are they prepared to wait if there is a delay in selling for whatever reason.

·        Consider all the offers on the table.  While the aim is to achieve the best possible price think about is this the best buyer for your position.

·        What deposit are your buyers offering?  If they have a large deposit then securing a mortgage will be easier.

·          Are they chain free?  how flexible are they?

·        Have they appointed a solicitor?

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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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To down size or not to down size, that is the question?

Moving is a big decision and never an easy one; the house you are in has memories packed to the rafters, good and bad. The children have gone and the commitment of running a household with surplus rooms is difficult to manage and maintain. So what are the options?

Firstly, do your research; there are many things to consider.  For example, do you follow your dream of living by the coast or move near your children?  Will you miss the extra space in the house? can you maintain outside space?

Housing for older people report was written with this interesting piece of information when looking to downsizing-

“One of the main barriers for older people and pensioners wishing to sell their family home and relocate is the lack of suitable choices. In June 2015, Legal & General commissioned a report which found that when last time buyers are looking for a new home, the most common preferences are being close to family and friends (32%), being near their current neighbourhood (18%), having easy access to healthcare (16%) and being located near shops (10%).1”

In reality all of these need careful consideration as downsizing is a major upheaval and there are significant costs involved, so it’s essential to factor in before you make you move. 

Apart from the money you may have collected by selling your no longer useful house belongings, smaller living spaces are generally less expensive and incur lower monthly maintenance cost, lower mortgage or rent payments, lower energy bills and fewer items to fix around your smaller accommodation.  It’s no secret that the housing costs take up a huge chunk off your disposable income and any way to decrease these expenses will let you have more breathing room when managing your finances.

This is also a good time to get rid of any unwanted furniture or lots of household items that is no longer required, what needs to be considered will it fit into your new planned abode?  All these items can be either given to charity or if they are in relatively good condition sold to provide welcome cash welcome cash injection to help offset the cost of the move.      

You’ll not only have to pay estate agency costs for selling your home, but you’ll also have to pay stamp duty on your new home, as well as covering removal costs and legal fees.  These costs, combined with the stress of a move, can be too much for many people, who may want to consider alternatives to downsizing to free up funds from their property. 

The easiest way of getting the most up-to-date information that you need about moving home is to consult a respected, local professional. 

In essence, downsizing doesn’t have to be a hassle or a traumatic experience and parting with the things you own can definitely be emotional, but try to think about the life you’ll get in exchange for the things you’re giving away, I believe the term is ‘Less is more!’

If you’re moving into a smaller accommodation in the area you’ve always wanted, try to make sure that the new life is as happy as possible.  If you’re downsizing because you need to save money, think about the money you’ll save and all the money you have received from selling unwanted goods, use it as an incentive to never get stuck in a tricky financial position again.  Whatever your reasons are, attitude matters and the more positive you can make the process, the smoother it will go.

1)      Communities and Local Government (CLG) Committee inquiry - Housing for older people Written submission from NAEA Propertymark March 2017

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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, 5 Netherby Gardens Enfield EN2 7PA. There is plenty of parking and the kettle is always on.

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Hampstead Property Market – Quarterly Update

It’s been an interesting and challenging year for both landlords and vendors. Speaking with several landlords in the local area, many have expressed concerns about their tenants’ ability to pay and balancing that with the need to have the rental income at least rise with the rate of inflation. In previous years, rents were rising above inflation, though wages over the past 12 months have not kept up with inflation which has risen to 2.9%.

In the peak season of the local rental market (between June and September) the rents tenants have paid are the same as in 2016 and that is for properties that have been well maintained, offered in good overall condition. Over the past year, rents in the Hampstead area have fallen in real terms by an average of 5.5% at the lower and middle end of the market. At the upper end, that is primarily geared towards the corporate sector, has been far more precarious with falls exceeding 10%. Crucially, we have seen tenants looking at other locations outside of the Capital for reasons of affordability, and that, in part, has also brought about the increase in supply, leaving Londoners more choice.

Hampstead landlords have naturally been a little nervous about the downward trend as there is also the crucial element of what has been happening to Capital values, which is of interest to all property owners in the area. Over the past 6 months, the evidence from the Land Registry for recorded transactions indicates that average property values (for all property) in the Hampstead area have fallen from £1,603,188 to £1,377,580. In monetary terms, that is £225,608 or 14%.

We have to also take into account the seasonality of the property market, with the majority of these sales having been agreed in the spring and completing in the summer months.

Since the beginning of the year we have seen an increase in supply of 15% in total number of properties available to 715, this has slowed house price growth. If you are considering selling your home, it’s important to remember that your property is on the market in competition with – not in isolation to all the other homes on the market- therefore correct pricing is essential. In this information age society that we live in, everyone has access to every property on the market and will naturally compare your home with similar ones.

In the medium term, I maintain the view that the Hampstead property prices will stabilise and gradually recover. Despite the increased choice for buyers, if we go back a few years to the recession of 2008/2009, the availability of housing in the area is far less today than it was then. In 2008 for example, there were 1163 properties offered for sale in comparison to the 715 currently available. The falling supply of homes over recent years will help to keep prices relatively high over the medium to long term.

So what has brought about this trend?  There are a number of variables in the equation; firstly, fewer people are moving home as frequently, which means less property for sale. Secondly, Hampstead, like most areas, has a good proportion of buy to let property. Landlords tend to hold their investments, selling far less often than owner occupiers, removing property from the market altogether.

The next issue is the cost of moving, the revisions in Stamp Duty have made it far more expensive than before adding to the constraints of buying a home. We are also living much longer nowadays, therefore owner occupiers are much older and will move less often, especially as they reach pensionable age. Following on from that, Governments (past and present) ill thought out Housing Policies mean that we are about 50% down on the number of new homes that need to be built to address the supply/demand imbalance. We need around 250,000 built per year; current figures show a paltry 130,000 or so. Last, but not least, the mortgage rules introduced back in 2014 mean that lending criteria is far more stringent, limiting the level of borrowing a person can take on. 

This in particular, has had a significant impact on the Hampstead property market when you consider that the average house price for a terraced/semi detached home is nearly 5 times the London average.

To put all this into perspective, Hampstead homeowners who aren’t planning to sell, the downward trend in prices is what we see on paper and is a cycle of the current market. To those who are committed to selling, they are also buyers, therefore, even if you don’t achieve as much as you may like for your home, the one that you are buying won’t be as much.  

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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.

Don't forget to visit the links below to view back dated deals and Hampstead Property News.

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Hampstead Property Market – A year on from Brexit

The Land Registry has just released their latest set of figures for the Hampstead Property market. It makes interesting reading, as average property values in Hampstead dropped by 4.2 % in June. This leaves average property values 1.2 % higher than 12 months ago, meaning the annual rate of growth in the area fell to its lowest level since January 2012 according to a recent survey by Home track When we compare Hampstead against the regional picture, London property values rose by 2.6 % overall with buyer sentiment having had a more significant impact as a result of the EU Referendum and political uncertainty with a much weakened Conservative government.

Obviously this is a far cry from the price rises we were experiencing in Hampstead throughout 2014. At one point (August 2014 to be exact) property values were rising by 22.7% a year. All the same, the correction we are seeing will have a greater significance for distressed sellers who have a greater urgency to release funds.

However, the thing that concerns me is that the average number of properties changing hands (i.e. selling) has dropped substantially over the last couple of years in the area. For example in April 2014, 90 properties sold in Hampstead but in April 2015, that figure dropped to 41. The most significant event that had bucked the trend in 2016 was the announced Stamp Duty hikes on both primary residences and second homes which saw a substantial increase in supply in the first quarter with 133 properties sold in March of last year and for April 2017, the figure stands at 32.  Traditionally, the spring season is where the market starts to become active, though political headwinds over the General Election, stalled activity in the local market with a sharp fall of just under 22% of completed sales compared with the same period in 2015.

See the graph below - (Source Hampstead Property Blog Research)

In the main, the UK economy is centred around its housing market, the other reliable barometer are share prices in the large house builders like Wimpy homes with jaw dropping fall of 37.5%  and Barrat at a staggering 43%, all within a fortnight of the Referendum result. In June values in Hampstead fell by over 4% in real terms, though the market is hardly in freefall. Since then, the share prices for house builders have recovered well and the recent price falls we have seen in the local market will plateau in the near future. The Office for Budget responsibility has downgraded its forecast for the next 5 years showing average prices rises of 4.3% which is good news for the medium to long term.

The correlation between unemployment and house prices is strong. According to the ONS as of March the figure for the local constituency of Hampstead and Kilburn stands at 7.2% or 6,700, compared to the 10.7% of 2013, suggesting that the underpinnings of the local market are pretty robust. Overall, Brexit has caused a temporary wobble, though nothing significant enough for serious long term effect.  

As mentioned in my previous article, the more pressing issue is with inflation, currently at 2.9% and will likely rise into the final quarter of 2017. The Bank of England has dropped a subtle hint that rates may have to rise to bring it under control as the Sterling has weakened and imports are now dearer. Even so, over 85% of mortgages agreed so far  this year have been with fixed rates, very much with this in mind, and it’s a far cry from the early 90’s with rates at 15%.

Despite theses issues having impacted on the sentiments of purchasers and sellers, they will get fixed in time. The greatest threat to the Hampstead (and UK) property market is the shortage of new homes being built for a variety of tenures, especially in the big cities. When you consider that only 2.3% of all the land in the country is actually built on, the pressure on the Government to get its act together with a coherent housing policy is greater than ever. 

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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.

Don't forget to visit the links below to view back dated deals and Hampstead Property News.

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The Hampstead Property Market- Is This A Good Time To Invest?

The UK economy has taken a bit of a bashing over the last 2 quarters as we have seen some indicators that it may be heading into some choppy waters. The three  areas of concern are inflation standing at a four year high of 2.9 %  (with the figure expected to rise before the year is out), sagging wages and of course a weakened sterling. This slow but sure downward trend in the rate of growth has been in evidence since mid-2016. As many as 35 % of properties for sale in the Hampstead area have had their prices slashed and for those who are serious about selling need to be realistic and not optimistic in order to attract buyers. The local market is going through a period of stangnation rather than a boom, the asking price reductions mentioned above were on housing stock offered by vendors hoping achieve 2016 prices. Property values in the London region as a whole are only 1.2% higher than a year ago making second from bottom in the UK regional table. Compare this to the neighbouring regions of East Anglia, seeing the highest growth at 4.6% and hot on the heels in second place is the North West with house price growth at 4.2 %, the majority of the country continued to see annual house price gains with Wales outperforming London at 1.6%

Even with the correction in house price inflation and the current mood somewhat subdued, it does not necessarily change my outlook that property prices are likely to be firmer over the final quarter of 2017 with an average increase of around 2 % .As stated in a previous article, there is a current shortage of properties on the market, restricting supply, which has been falling consistently since the recession of 2008/2009 which in turn will provide some stability and support to Hampstead property prices.

Property investment is a long term business.  Buying the right sort of property is vital. I have recently been speaking with a number of Hampstead landlords about the importance of a balanced portfolio, when buying and renting out property. The balance between buying properties that offer good monthly returns (high yields) but quite often offer poor capital growth (i.e. they don't increase in value that much over the years compared with the average) verses properties that do go up in value quicker but often offer a lower yield.  So, what type of properties has performed best over the last few years in Hampstead, especially in terms of their capital growth?

When comparing what the average price of detached, semi detached, terraced and flats were selling for back at the start of the Millennium to the present.  The results are remarkably different, almost like a bag of Liquorice Allsorts, as the different types of property have performed poles apart over the last 17 years:  

• Detached Houses in 2000 were selling on average for £2,200,000 and so far in 2017, they have been selling on average in Hampstead for £5,350,000 a rise of 143%
• Semi -Detached Houses in 2000 were selling on average for £1,220,000 and so far in 2017, they have been selling on average in Hampstead for £3,955,000 a rise of 227%
• Terraced Houses in 2000 were selling on average for £800,200 and so far in 2017, they have been selling on average in Hampstead for £2,065,000 a rise of 158%
• Flats and Apartments in 2000 were selling on average for £332,203 and so far in 2017, they have been selling on average in Hampstead for £1,015,079 a rise of 205%

S See the graph below - Source Hampstead Property Blog Research

1. 

For those who have invested in the local property market in recent years, what should new and existing buy to let landlords do with this information?  Well, the questions I seem to be asked on an almost daily basis by landlords are:

·  “Should I sell my property in Hampstead?”

·  “Is the time right to buy another buy to let property in Hampstead and if not Hampstead, where?”

·   Are there any property bargains out there in Hampstead to be had?”

Many other Hampstead landlords, who are with both us and other  Hampstead letting agents, like to pop in for a coffee,  pick up the phone or email us to  discuss the Hampstead property market, how Hampstead compares with its closest rivals (St John’s Wood, Notting Hill, Chelsea or Kensington), I will just give you my honest and straight talking opinion and look forward to hearing from you.

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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.

Don't forget to visit the links below to view back dated deals and Hampstead Property News.

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My Tenant Has Disappeared – What Shall I Do?

In the main tenancies are conducted without disruption and within the usual processes and procedures, there will be a check out meeting and keys handed back to either the landlord, his agent or the Inventory clerk.

Though on the odd occasion, you may find that your tenant has just disappeared, what then?  Do you just re enter, clean the place up and re let?

Well, yes and no- and many landlords act instinctively and go with their gut feeling. The typical thing is to change the locks, though this puts you on the wrong side of the law with your actions resulting in an unlawful eviction.

You could get hit from both sides here as firstly, the Local Authority can prosecute you and secondly, if the tenant reappeared out of the blue, he/she could sue for compensation.

If you had reason to believe that the tenant had finally vacated, then this is your one line of defence. In situations like this and for the sake of covering your own back – best practice is to leave an abandonment notice on the door. save any comebacks.

The only drawback with this is if there was some kind of unforeseen event concerning your tenant; he/she may have been involved in a serious car accident and was in intensive care for 2 weeks or even the sudden passing of a close relative would both suggest that your tenant may not even have seen the notice.

As this is a Civil matter, in law there is the concept of what is known as Implied Surrender, this means that if the tenants actions were not consistent with vacating in the usual way, as a landlord you can accept the offer to vacate the property and go in and change the locks.

The question is how you know when this will apply – here are the four different scenarios:

1      Has the tenant indicated that he will vacate by a certain date?

If the tenant told you in April that he would be leaving in June and there was no further correspondence or contact and you visited the property say in July and saw there was no one there – it’s a fair assumption that your tenant has left. This however, may be subject to the following;

2     Have any keys been left behind?

This is the most important sign- if keys have been left behind, then it suggests that possession has also been given up.

3    Are any possessions left behind?

If you see no sign of any personal possessions left in the property, then it would be safe to assume that the tenant has given up possession of the place, especially, if the keys have also been found in the property.

In the instance that you find the tenants possessions remain in the property, then it may be wise to take a cautious approach and apply for a possession order from the Court.

Are there any rent arrears?

Unless you can see that the tenant has clearly moved out, do not go for possession of the property if you have been receiving rent and payments are actually up to date. If the tenant wants to leave the property empty that is their prerogative

If on the other hand there are arrears and you find the place empty and keys left behind, then it’s safe to proceed with getting the place ready for re letting.

It will also make it safer for you to repossess, if the tenant was to make a claim against any illegal eviction, any award he gets would be off-set against any rent arrears.

Again, it pays to be cautious as tenants are entitled to occupy the property whilst be in arrears, until such times they are evicted by a court order.

Final thought

If you have used an Agent to rent your property or otherwise, it’s always worth having details of your tenants next of kin as a point of contact in such a situation may prove to be very handy, in this situation. It’s also been known for dishonest tenants to make it look as if they have moved out to entice the landlord to gain possession  only to try and sue them later to be compensated for unlawful eviction. 

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.

Don't forget to visit the links below to view back dated deals and Hampstead Property News.

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Hampstead Homeowners Move Once Every 18 Years

Now that some of the dust has settled from the result of the General Election, the local market has become somewhat subdued and I expect that the ferocious rise in house prices we have seen over the past 2-3 years will stabilise of the next 12 months. We have seen the share price of these large house builders drop significantly since June 8^th,  though  it’s this supply and demand imbalance that brings me on to what I see unfolding as a long term trend in the Hampstead property market.