On the Market - Little Venice, Autumn 2013
Fri 20 Sep 2013
Rose Holden looks at the high level of competition for property and considers what lies ahead for buyers and sellers
So far, 2013 has been a very strong year for the Little Venice & Maida Vale property market. Increased confidence, coupled with low interest rates and government stimuli, has acted as a catalyst, driving the market forward and most noticeably, unblocking the bottleneck of buyers at the bottom of the property ladder, who are desperately needed to free up buyers and sellers further up the chain. This in turn has generated an increase in the number of buyers entering the Maida Vale property market, resulting in price increases of 10-12% year on year, as buyers compete to secure their dream homes. With no signs of this trend abating, buyers are scrambling to secure their ideal property before they become out of reach.
Demand from buyers is so high, theyre going to great lengths to secure the right property. Just last week, our Little Venice office registered a buyer from France and on Tuesday we showed him a handful of properties that met his requirements. On Thursday he instructed his solicitor to carry out an attended exchange, fully aware that demand for this property is exceptionally high he even paid over the asking price for good measure. He moves in, in just overa week.
With this level of competition, its no surprise that prices in the area have substantially increased this year already. Currently, we have almost 15 buyers registered for every property for sale with this office alone (up 16% on the same period last year), not to mention the additional buyers we have registered with our neighbouring offices in Marylebone, North Kensington and Notting Hill.
So how long will this last? Looking forward, as we enter the traditionally busy autumn market, there will undoubtedly be more stock and an increase in transaction levels. Along with more property though, will be an increase in buyers, which is great news for sellers as demand is likely to remain strong. However, Mark Carneys announcement that the Bank of England plans to increase interest rates once unemployment reaches 7% means that low interest rates are not forever. As soon as interest rates increase, we expect demand to reduce, therefore sellers should make the most of the premiums being achieved now. Also, savvy sellers looking to trade-up recognise the value between what they can afford today and what they can afford tomorrow is gradually increasing. They also know that the historically, low mortgage rates wont last for ever, so they are locking in now for financial security and added peace of mind.
As we move through the autumn market towards Christmas, sellers have a window of opportunity to take advantage of this fantastic market. Buyers and sellers should all note that phase two of the Help to Buy Mortgage Guarantee scheme (for second hand homes), will launch in January. 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. If you are thinking of selling, now is the time to act!
Holly Goodge looks at thechanging demands in the Maida Vale rental market and how landlords can secure the best tenants
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 Little Venice and the surrounding Maida Vale area. This is good news for landlords, who earlier in the year, had suffered price drops due to an imbalance of supply and demand.
Currently, about 80% of our landlords are UK based, of which 50% still live in the Little Venice area with the remaining 30% having moved out of London. Overall, the majority of these investors have lived in the property previously either a hang-over from the accidental landlord days of 2007-2009, or more recently, are what we are referring to as intentional landlords who have chosen to retain their first property as an investment for the rental yield and capital growth. Interestingly and to reinforce the point, last month 91% of the properties we let, were for previous owner-occupiers.
A typical profile of a tenant in this area ranges from a professional couple working in the City looking for a one-bedroom apartment, together with families looking for two- to three-bedroom properties within the St Josephs catchment area. The latter group seem to be mostly already living in the area, having been served notice by their current landlord, who is potentially deciding that now is the best time to cash-in on a great sales market. Unfortunately for these renters, they are having to either raise their budgets to afford the same type of property, or down-size their requirements.
Unlike neighbouring RBKC, where two-bedroom properties are in over-supply, there is currently a mild shortage of quality two-beds for 400-500 per week in Little Venice. When they come onto the market, they rent quickly to either professional sharers or couples and if the property has access to outside space, then interest levels will be even higher. Having had plenty of one-bedroom properties throughout the summer, there has been a dramatic decline of 65% fewer properties compared to the previous month. These are being snapped up quickly and we expect it to push prices upwards in the coming weeks. In particularly high demand are those one-beds priced between 450-475 per week in the buildings overlooking one of the areas stunning garden squares.
Our Corporate & Relocation Services Department works with a large 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. 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 therefore 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%.
Whereas last year there was a stark shortage of property to let and vast tenant demand, there is now a much more healthy balance of both property and tenants. Landlords can generally expect similar rents to this time last year, but when you consider the 15-20%, on average rental rises in the previous two years, its still a great time to be a landlord!