On the Market - Barnes, Spring 2013
Thu 25 Apr 2013
Kelly Stafford looks at the ever increasing demand for property in Barnes across all price brackets, and explains why the Budget was good news for the housing market
Property prices in Barnes continue to rise due to a shortage of available stock on the market. Since the beginning of the year, there has been good demand with an average of 21 registered buyers per available property; higher than any of the other 19 areas of London that we cover. 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 period, and therefore, we expect this price growth to stabilise in the coming months.
Properties below £1m are very sought after, with properties in the Little Chelsea area selling very quickly when they come onto the market. However, competition amongst buyers is highest in the £1m to £2m price bracket, where upsizers and downsizes are seeming to meet in the middle. As a result, we are achieving record prices for these premium properties. The £2m+ market has really stepped up since the beginning of the year and we have just agreed a sale for a house on Nassau Road for close to £1,000 per square foot; a price comparable to some prime central London areas. In this price bracket, over 50% of the properties we have sold this year, are to buyers moving from prime central London who are side-stepping on price, but in some cases, doubling the size of their home.
In contrast to other London locations, the foreign investment into Barnes property has tended to come from America, as opposed to Europe, but the majority of investors are in fact, domestic buyers who want to reap the rewards of the 5% capital growth that the area has enjoyed already this year. Developers are simply not getting a look in, as end users are prepared to pay such a premium for unmodernised property. An example of this was the recent sale of a property on Suffolk Road, in need of complete modernisation, which after four offers via a sealed bid, sold for more than the asking price for a staggering £978 per square foot!
The biggest challenge faced in the property market is the chicken-and-egg scenario, where property is moving so quickly that buyers are waiting until they have found a property before putting theirs onto the market. With such tough competition, these buyers are missing out to those who are considered more proceedable. We would advise that buyers, at least have their property on the market, or ideally, have their property under offer, to make themselves more attractive in the bidding process.
With Easter out of the way (a month earlier than last year), we are now entering a traditionally busy time for the property 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 London property market, especially as over 60% of property in Prime Central London is now valued at more than £1m.* More recently, buyers have adjusted to the stamp duty increase introduced for £2m+ property last year, and are now factoring this additional tax into their purchase.
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 Barnes Sales Team on: T 020 8563 8333 E email@example.com
Sophie Levy, Lettings Manager looks at the changing demands in the Barnes rental market and how landlords can secure the best tenants
The first quarter of the 2013 lettings market started strongly in Barnes. As soon as we opened our doors in January, we saw huge demand for flats from professional couples and, the emergence of a new trend a high number of professional sharers, something which is relatively new to this area. Over all in Q1, we let 52% more properties than in 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 prices in Q1 fairly stable, its interesting to reflect on the reasons for the increase in the amount of tenancies agreed. 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 move.
Secondly, 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.
Thirdly, with this is a new, rapidly growing trend. 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 corporate applicants registering with our Corporate & Relocation Services department, looking for rental property in Barnes. 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 longer tenancies making them a very attractive proposition for any landlord. We recently rented a four-bedroom property on Clavering Avenue at the full asking price within days, despite it being unsuccessfully on the market for three months with another agent.
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.
Recent tenancies have been secured for families targeting schools in the area, specifically St Pauls and the Harrodian. In fact, in the last few days, weve rented out two houses to corporate applicants: the first on Newport Road for 5,800pcm to a Spanish family with children at The Harrodian and, a four-bedroom house on Clavering Avenue, to a another family for the full 3,000pcm asking price.
At the beginning of the year, we had a double-digit number of houses on the market; however currently, were lucky if we have more than three on at a time, such is the current level of demand. And, its not just the `normal sized houses that are in high demand; the large houses on Lonsdale Road are commanding prices of in excess of £16,000pcm.
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 fused 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 our Barnes LettingsTeam on:T 020 8563 8333 E firstname.lastname@example.org