On the Market - Barnes, Spring 2012
Fri 20 Jul 2012
Shortage of property, price hikes and sealed bids in the Barnes property market.
by Kelly Stafford
I know that everyone is saying the same thing, but its a fact: theres nowhere near the number of homes for sale to keep willing purchasers happy. Marsh & Parsons now has a staggering 31 buyers registered for every available property in Barnes. This shortage of property has meant some substantial price hikes an uplift of between 5 and 10%, (depending on location and quality), with Marsh & Parsons selling these properties, on average, within 2% of asking prices.
Over the past year, Barnes has been busy across all sectors however, the most active price range has been between about 600,000 and 1.5 million, where its been so competitive that buyers have sometimes had to bid in excess of the asking price to secure their preferred choice.
In the first time buyer sector of our market, 300,000-500,000, it has been somewhat constrained by the lack of mortgage availability, however this appears to be easing and we are now seeing plenty of first time buyers with healthy deposits entering the market.
The top end of the market, 1.5-3+ million, remains strong in Barnes and whilst it is more City reliant, there are plenty of prospective buyers for the stunning family homes that Barnes is well known for. Of course, they remain cautious of overpaying for their next home however, if a property is well priced and we identify the right purchaser, they are usually able to move very rapidly.
At the start of 2012, a process of expectation realignment between buyers and vendors has emerged. Sellers may need to be more realistic about their propertys worth and having explored the market via a marketing campaign be prepared, if necessary, to bridge the gap to finesse a deal with a purchaser. Equally, buyers will have to understand that if the price has dropped a certain amount it would be foolhardy to haggle too much. Theyre looking for a home in which to live, which historically has appreciated well in our corner of London so why scupper a deal in a pointless battle of wills?
The trend in staying put and adding value through extensions, digging out basement rooms and converting the loft is likely to continue for some homeowners, but if more stock comes along to kick-start everything in early spring, many will decide to move rather than go through the hassle of calling in the builders.
General positive sentiment will filter through this year as we host the Olympics and celebrate the Queens Diamond Jubilee. Even if it doesnt affect us directly, well all benefit from the Olympics feel-good factor, making London a great place to be.
With three people looking for every one rental property, Sophie Levy predicts whether this competition looks set to continue throughout 2012...
Marsh & Parsons research shows there are now three people for every one rental home thats available. Not dissimilar to the sales side of the office, were dealing with competing bids for the best lettings property due to the shortage. This is driving values over asking prices and in some cases up to 30% higher than the rent previously achieved for the same property.
2012 wont differ greatly from last year. There wont be large numbers of rental homes coming onto the market, which I expect to remain steady. One factor thats driven the increased demand and resulting lack of supply, is that there are older, first-time tenants hunting for somewhere to live for six months or more. Theyve sold their own property to be chain-free and have put themselves in a good position to buy a property quickly, when they have found something suitable.
Theres an education process for both landlords and tenants, and its our job as agents to help with this learning process. It can be tricky at times to deal with pre-formed expectations that might need to be loosened and become more flexible. Tenants, whove been used to living in their own property, need to realise that a rental property is not their permanent home and a landlord might not be keen to paint every room a different colour.
Theres been good news on the investment side with more buy-to-let landlords investing in property. Those in a position to buy, using mainly cash or family money, are seeing great yields, especially for the one- and two-bedroom properties. With fewer purchasers at the lower end of the market, including first-timers, and higher returns of 4-5%, investing is an attractive option.
The state of the lettings market this year will depend on the number of properties available and the level of enthusiasm from landlords and tenants alike. An influx of foreigners wanting to rent in the capital could influence what happens as well. We typically rent to a variety of people from abroad, including Americans, Australians and Swedes who like to live close to the Swedish school.
And finally, my advice to landlords wondering whether to kick out existing tenants for the three-week Olympic period, is to think long-term. Unless youre set up specifically for short-lets, it might not be worthwhile having to pack up your personal belongings and adhere to various safety checks and codes for such a short time. If the scenario of three people chasing after every one home continues, a longer let certainly makes sense.