On the Market - Little Venice, Spring 2013
Thu 25 Apr 2013
Natasha Mace looks at the different types of buyers fuelling demand in Maida Vale and explains why the Budget was good news for the housing market
Having enjoyed an average property price growth of around 5% in Maida Vale throughout the first quarter of 2013, values have steadied and are now moving towards a more sustainable rate of increase. Buyer demand remains strong, however a mild improvement in the supply of available property is easing this pressure, with the buyer-to-property ratio now standing at 11.4 buyers for every property, compared to 15.1 during the same period last year.
Sellers in Little Venice are typically up-sizing and a natural migration seems to be north to Queens Park or Kensal Rise, where interestingly, those sellers tend to be moving out of London altogether. Competition amongst buyers is highest in the 500k to 1m price bracket, where there simply isnt enough property to satisfy the demand. On average, buyers are offering on two to three different properties before they eventually secure a home and as a result, we are achieving record prices. For example, within just one week, we carried out 26 viewings for a property on Chippenham Road and agreed a sale for the full asking price a record for the street. Contracts exchanged a week later.
Foreign investors are tending to opt for the period mansion apartments because they love the charm of the traditional mansion blocks, which boast original Victorian features and beautifully high ceilings, as well as perfect lateral living. In 2009, prices for mansion apartments started at a modest 620-640 per square foot, but since their popularity has escalated, and London property prices have risen, we have seen this increase considerably. Some of the most sought-after apartments are those overlooking the Paddington Recreation ground, located just a few minutes walk from Maida Vale underground station, as well as being on a very quiet, tree lined street. For example, we have recently sold a property on Grantully Road for 960 per square foot an increase of 64% in three years, and as demand remains strong, this upward trend seems likely to continue. As a point of interest, of the four most recent mansion apartments we have sold, two of the buyers were French, one was Italian and the other was Nigerian.
So far this year, almost 25% of our sales have been to domestic buy-to-let investors, who are tending to buy with a long-term view, particularly in the 350-500k price bracket. They tend to prefer the period conversions and are investing now to enjoy the rental yields, but more importantly, a capital appreciation to rival even the most glamorous London addresses. The new cross-rail link to the City, which is due to open in 2018, will provide access to Liverpool Street in six minutes and Canary Wharf in 17 minutes, as well as 24 trains an hour at peak times in each direction.
There has been relatively little activity in the house market, due in part to houses representing only a small proportion of the local market, but also due to would-be sellers hanging onto their bricks & mortar asset. That said, when a house does come onto the market, it will attract huge interest and in many cases will sell for a record price. As is traditionally the case, we believe that most of the years price growth will have happened in the early part of the year, meaning that now is unquestionably a great time to start thinking about getting your house on the market.
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, are ready to invest in a much needed supply of new property.
Contact our Little Venice Sales Team on: T 020 7993 3050 E email@example.com
Holly Goodge looks at thechanging demands in the Maida Vale rental market and how landlords can secure the best tenants
The 2013 lettings market started strongly in Little Venice and Maida Vale, with a staggering 72% increase in the number of properties let in Q1 compared with the same period last year. With such an increase of supply to the market, youd be forgiven for thinking that prices may have suffered as a result of increased stock levels. Curiously though, they didnt. We saw rent increases of around 5% one example being a one-bed on Elgin Avenue, which we re-let for 7% more than the price achieved just 12 months ago.
As we move through the Spring into early summer, the market continues to be busy. So why the significant increase in market activity? There are several factors at play. Now more so than ever, London continues to be the destination of choice for many international rental investors which is hardly surprising given the continued financial crisis in the eurozone, and this is reflected in the investor demographic. In addition to domestic and international portfolio landlords, an increasing number of our landlords are single property investors, with an increase also in the number of existing home-owners choosing to hang onto their property, rather than sell when they move.
Rental yields are no longer the primary incentive for many investors. The appreciation of London property prices 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.
Coupled with this is a new, rapidly growing trend. In all areas of Maida Vale the professional sharer appears to be the most represented type of tenant for flats. They are slightly more price sensitive, as they are more often than not, saving hard for a deposit so that they can buy their own property a few years down the line. However, 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.
Additionally, we have seen a 15% increase since the beginning of the year in the number of corporate applicants registering with our Corporate & Relocation Services department, looking for rental property in Little Venice and Maida Vale. These tenants are often the best, as in most cases, they are able to offer at least six months rent in advance and commit to a longer term, making them a very attractive proposition for any landlord. We recently rented a three-bed flat on Norfolk Terrace to a Russian banker and his family, within a week of marketing.
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 out most noticeably two-beds, causing prices to creep up once again. Keen to get ahead of the competition and settle before the summer, families are also starting to move. If children are in the mix, competition will get fierce over the next few weeks, with parents literally battling to get the right property, on the right street, that falls within the right school catchment areas. In fact, weve just rented an apartment on Castellain Road for two years straight, to a Spanish family who plan to send their children to St Saviours Primary School on Shirland Road perfectly illustrating that early planning pays off.
Despite rental prices heading north once again, good tenants are now more savvy and continue to look for value in the market. When pricing property, there is a fine line between asking just enough and too much and we make sure our landlords dont fall on the wrong side of that line! For reassurance, landlords should familiarise themselves with the competition and to attract the best tenants, they should present their property in the best possible light. If there is a damp spot, dirty windows or blown light bulbs, get these things fixed before putting your property on the market. First impressions count, so spending a few pounds will almost certainly increase the appeal of your property and attract the highest calibre of tenant. 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 Little VeniceLettings Team on: T 020 7993 3060 E firstname.lastname@example.org