On the Market - Brook Green, Autumn 2013
Fri 20 Sep 2013
Paul Price reflects on the shrinking difference in price between Brook Green and the neighbouring Prime Central areas as well as the increasing demand for property
So far, 2013 has been another great year for the Brook Green and Brackenbury Village property markets, with demand for property in the area at an all time high. A continued lack of stock coupled with an increase in the number of buyers registering with our local Brook Green office has resulted in 19 buyers registered for every available property for sale. Many buyers are migrating from Prime Central London including neighbouring areas in the Royal Borough of Kensington and Chelsea, attracted by the local villagey feel, the great schools, the unrivalled transport links, and most importantly, the cheaper price tag.
That said, the discount afforded in this area compared to neighbouring suburbs such as Notting Hill and Holland Park, continues to reduce, as investors enjoy higher returns in terms of rental yields for buy-to-let investments, coupled with a stronger capital growth compared to Prime Central London. Indeed, the rate at which prices are increasing in some cases is staggering. For example, weve just sold a flat on Warwick Gardens for 616,000; we sold the same flat in the same condition in 2011 for £470,000 - an incredible 31% increase in just under two years. And it's not just flats. We sold a house on Wolverton Gardens W6, in the summer of 2012 for £945,000; exactly a year later, we sold the same property for £1,135,000 - a 20% increase.
With so much demand from this office alone, it's no surprise that weve experienced a consistently busy market since the beginning of the year. Only in August, albeit slightly, did the market pause for breath as it always does at this time of year, with sellers and buyers distracted by the holiday season. As we move into the autumn, it's clear that sellers achieving the best results and highest prices are those instructing experienced and well established local agents. Time and time again, I get instructed to sell properties that have already been on with other agents without success, generally because sellers feel they are getting a bargain, paying 0.25% or 0.5% less in commission. In fact, we recently sold a house on Milson Road to a buyer registered with our Notting Hill office; the property had been sitting on the market unsuccessfully with another agent for two months. Once we were instructed, we knew exactly who to call and agreed a sale within a couple of weeks.
Whilst it may be tempting to go with the cheapest agent it's a false economy and my advice is to do your homework first. Find out what they have sold in the area recently, how many buyers they have access to and most importantly, what they know about the local property market. As Christmas approaches, sellers have a small window of opportunity to take advantage of this fantastic market and achieve the best results.
Buyers and sellers should all note that phase two of the 'Help to Buy Mortgage Guarantee' scheme (for second-hand homes), will launch imminently. We anticipate this being a catalyst for home-owners across the country, who will see the scheme as a great opportunity to move on, freeing up much needed property for the ever-increasing number of eager buyers. This may ultimately reduce the premiums achieved on property in this area, as buyers are exposed to more choice. So, if you are thinking of selling, now is the time to act!
Graeme Young looks at the move from accidental landlords to intentional landlords, and increasing demand for two-bedroom properties and corporate rentals
The traditionally busy lettings season is in full flow and demand from tenants is across the board - families, corporate relocations, sharers and professional couples are all seeking property in the Brook Green, Brackenbury, Hammersmith and Shepherds Bush areas. However, with more property on the market compared to the same period last year (we have almost twice as much stock), it's essential that landlords present their property in the best possible light and at the right price so they don't fall victim to void periods.
In this area, domestic landlords make up approximately 70% of the market, the majority of whom have been owner occupiers at some point. The 'accidental landlord' phenomenon of 2007-2009 has now been replaced with 'intentional landlords', who are choosing to retain their first property for the rental yield and capital growth. About 20% of landlords are European investors, mostly French and Italians, whilst the remaining 10% are largely Far Eastern, where Malaysian buy-to-let investors are increasingly prominent. The latter are tending to register as buyers in Notting Hill or Kensington and are tempted over to Brook Green for the higher rental yields.
The domestic 'intentional landlords' are either buying a second property, very often locally, or in many cases, renting up. With sales prices rising and rental prices staying stagnant, this practice allows them to stay on the property ladder, but live in something bigger or better - or both. We have also seen an increase in the 'short-term landlord', who are home-owners taking a secondment abroad with every intention of returning in several years.
Unlike neighbouring RBKC, where two-bedroom properties are in over-supply, there is currently a shortage of quality two-beds for £400-£500 per week in Brook Green. When they come onto the market, they rent quickly to either professional sharers or couples and if the property has outside space, then interest levels will be even higher. We recently let a two-bedroom property within 48 hours on Davisville Road, just off Askew Road, after several bids for the full asking price of 425 per week. The same property, which is not considered to be in the most sought-after location, took several weeks to rent a year previously.
Again, in contrast to neighbouring areas, where there is a shortage of one-bedroom properties, the opposite seems to be true here. The oversupply could be a result of the second-steppers who have decided to rent their first purchase, but also, we believe the profile of tenants looking for one-beds is very different to that of two-beds and a contributing factor to why it may take a little longer to find tenants. Those seeking a one-bed are much more conscientious and price sensitive - probably because they are saving for a deposit to buy. Tenants looking for two-beds, which command much higher rents, are less obsessive about getting onto the property ladder, and instead are happy to use their hard earned money for great quality accommodation. The latter is far more likely to commit to a longer term tenancy too.
Our Corporate & Relocation Services Department works with a number of relocation agents and businesses of varying sizes. The team has recently noticed an increase in the number of high-end corporate enquiries, which in this area, we consider to be £1,000 per week and more. With companies becoming increasingly global, the need for experience across all markets is seen as a key attribute for future leaders, so there is a focus on relocating their senior staff. Hammersmith is home to some of the world's largest brands, so is at the centre of this emerging trend. Just a few years ago, these same companies were preferring to relocate more junior employees to save on ex-pat packages. This movement would also explain the rise in rental property coming onto the market, whose owners are leaving their homes, and London, to spend a few years working in foreign cities. The proportion of tenancies that have been agreed with corporate tenants has increased by 12% when compared to the same period last year and the amount of rental contracts agreed overall has increased by 25.5%.
In our experience, corporate tenants tend to be the most favourable. They invariably have excellent budgets, they spend very little time in the property, so wear and tear is kept to a minimum and most notably, they almost always have a regular cleaner to keep the property in great condition.