On the Market - Brook Green, Spring 2013
Thu 25 Apr 2013
Paul Price looks at the increasing demand from buyers and why the Budget was good news for the property market
In Brook Green and the surrounding Brackenbury Village and Hammersmith areas, property prices have risen by up to 7% since the beginning of the year. A lack of available property and increasing demand from buyers has helped to push these prices upwards and the demand is not showing any signs of easing. The number of buyers registered for every available property now stands at 15.7, compared to 10.5 in January. Whilst we expect the buyer demand to remain high, we also anticipate that more property will come onto the market as we head into the traditionally busy summer market, and therefore, we expect this price growth to stabilise in the coming months.
Competition amongst buyers is highest in the 1.5m to 2m price bracket, where buyers can get a 2,000sqft Victorian family house for less than 2m a rarity so close to central London. As a result, we are achieving record prices for these premium properties and the price per square foot is being pushed above 1,000 in many cases. Indeed, we have just recently sold a three-bedroom house on Milson Road for 1,044 per square foot, to a buyer originally registered with our Notting Hill office who, despite the local price increases, saw Brook Green as offering comparatively great value. So far this year, almost 30% of our sales have been to buyers registered with our Notting Hill, Holland Park, Fulham and North Kensington offices. Compared to other areas of London, Brook Green hasnt had the same level of interest from foreign investors. However, the area is starting to attract an increasing number of foreign nationals, who have perhaps spent the last year or two renting in nearby areas of London and decided to settle in Brook Green, where the transport links into central London offer a great, more affordable alternative. After 36 viewings for a property on St Dunstans Road, it was an Italian cash-buyer who had been renting locally, who snapped up the house for the full-asking price.
There is also a shortage of property around the 500k mark and plenty of buyers, particularly for the two-bedroom garden flats. Within just two weeks of being on the market, we sold a two-bedroom property on Sulgrave Road for the full asking price of 450k. We carried out more than 40 viewings, which illustrates just how highly sought-after these properties are.
With Easter out of the way (a month earlier than last year), we are now entering a traditionally busy time for the property market across all prime areas of London. The buyer-to-property ratio is unlikely to change however, as more choice of property will inevitably attract even more buyers to the market. The recent budget has provided clarity for both buyers and sellers, and so, with a renewed sense of certainty, particularly with the absence of a mansion tax and no sign of a stamp duty hike to 7% for 1 million property, the sentiment in the market is more positive. A more penal stamp duty levy at 1m would have been bad news for the central London property market, especially as over 60% of property in Prime Central London is now valued at more than 1m.* Buyers are gradually adjusting to the stamp duty increase introduced for 2m+ property last year, although the 2-2.5m market is still experiencing some caution.
In our opinion, the Budget in general, was good news for the property market. The Help to Buy Scheme will provide 130bn worth of mortgage support to buyers at the sub 600,000 level. Whilst this may not have a huge impact on buyers in Prime Central London, it will effectively rescue mortgage prisoners across London and the UK, who have been stuck in their current property, unable to move onto the next stage in their property-buying career. In turn, this will free-up much needed property for first-time buyers, which is depressing supply throughout the housing chain. The scheme will also provide buyers with up to 20% equity loans for new build properties, which we hope will provide confidence to house builders that a ready, willing and most importantly able market, is ready to invest in a much needed supply of new property.
Contact Brook Green SalesTeam on: T 020 7605 7760 E firstname.lastname@example.org
Graeme Young looks at the reasons for an increased number of tenancies and why now is the time to let your property
The first quarter of the 2013 lettings market started strongly in Brook Green. As soon as we opened our doors in January, we saw huge demand for flats from both couples and professional sharers alike. Over all in Q1, we let 25% more properties than the same period last year a result of an increasing number of rental property coming onto the market, as well equally strong demand from tenants.
With fairly stable prices in Q1, its interesting to reflect on the reasons for the increased number of tenancies. There are actually several factors at play, which go a long way to explaining why. Firstly, London continues to be the destination of choice for many rental investors, now more so than ever, which is hardly surprising given the continued financial crisis in the eurozone. Also, in addition to domestic and international portfolio landlords, an increasing number are single property investors. We are continuing to see an increase of existing home-owners choosing to hang onto their property and find good tenants, rather than sell when they trade-up.
Secondly, rental yields are no longer the primary incentive for many investors. The capital appreciation of London property is the key factor now. For many Europeans especially, the London property market has never looked more attractive: we are not in the single currency, we have a stable government, Sterling is weak and there continues to be a chronic shortage of housing, especially in the Capital. Foreign investors who would play their part in the natural turnover of stock by cashing in on their rental investments, have little motivation to do so at the moment.
Thirdly, soaking up an increasing amount of the excess stock, is the emergence of tenants who have resigned themselves to the fact that buying is an unrealistic option, as prices continue to spiral upwards. They are willing to pay a premium for a higher standard of living, foregoing any savings generated through a more frugal existence.
Finally, we have seen a 15% increase since the beginning of the year in the number of applicants securing properties through our Corporate & Relocation Services department, searching for rental property in Brook Green. Hammersmiths location between Heathrow and central London makes it the location of choice for many businesses and recent corporate tenancies have featured applicants from the cosmetics, finance, fashion, FMCG and oil/gas industries. Corporate tenants are often the best, as in most cases they are able to offer at least six months rent in advance and commit to longer tenancies, making them a very attractive proposition for any landlord. Current examples include an American family whove rented a house on Melrose Gardens for two years straight. For them Brook Green offers much better value than the Royal Borough, along with very good schooling alternatives their children attend St. Pauls School.
Since the Easter break, the London property market as a whole has changed gear. With the traditional influx of Spring tenants entering the market, any surplus in stock has dried up most noticeably two beds, causing prices to creep up once again. The house market has also come to life following an eight month slumber. Keen to get ahead of the competition and settle before the summer, families are starting to move and if children are in the mix, competition will get fierce over the next few weeks, with parents battling to get the right property, on the right street, within the right catchment areas for our excellent local schools. Weve just rented a five-bedroom house on Caithness road to a family moving from Holland Park, the pull factors once again being the excellent local schools and better value.
If youre thinking of letting your property and want to achieve the best price, now is the time to act. Summer has a habit of luring tenants away from the thrill of a good property search, not to mention the strongest rental prices.
Contact Brook GreenLettings Team on: T 020 7605 7760 E email@example.com