On the Market - Battersea, Balham & Clapham, Autumn 2012
Thu 20 Sep 2012
The autumn property market always encourages a flurry of new instructions and a plethora of enthusiastic buyers. Liza-Jane Kelly gives her advice on making the most of this window of opportunity.
The traditional autumn market is in full swing. An increase in available property for sale is mirrored by a surge in new buyer registrations and although not uncommon for this time of year, it represents an uplift of 10% compared to the same period last year. Interestingly, in the fi rst quarter of 2012 we recorded 13.6 buyers for every available property in our three offi ces surrounding the common and despite more property on the market, we still have a total of 13.5 buyers. So as demand continues to outstrip supply, we are preparing for a bumper market, yet again, for sellers.
Following an exceptionally strong first half of the year, where we saw prices increase by 6% to 7%, the Clapham, Battersea and Balham markets entered a period of seasonal slowdown, with homeowners keen to enjoy their properties during the school holidays, rather than open their doors to buyers. That said, the Olympics failed to bring the property market to a standstill and although buyer registrations declined, the number of sales agreed were up by 23% compared to the same period a year earlier as motivated purchasers took advantage of the quieter market. During this period however, property prices held firm with little to no increase.
In Balham there is a real mixture of fi rst-time buyers and families looking to buy property. Period conversions are in particularly high demand, especially if they have outside space. To give you an example, we have just sold four flats in quick succession on Hazlebourne Road, all within a week of marketing. Equally, houses in Balham, located within good catchment areas, are attracting great interest examples of which, include the Nightingale Triangle and Abbeville Village. And no stranger to the good schools effect our Battersea office, just around the corner is still experiencing huge demand for family houses between the commons. As a result, we have just recently sold two properties on Grandison Road for in excess of the asking price.
Unlike central London, people who live in the Clapham, Balham and Battersea areas tend to stay here, moving up and down the property ladder testament to what a great place it is to live. Young professionals continue to flock here, often with a helping hand from the bank of mum and dad who see property as an appealing investment alternative to traditional banking products, whilst at the same time being able to help their offspring. As well as the green open spaces of the commons, buyers are attracted by the fantastic selection of restaurants, pubs, bars and shops, as well as the beautiful, large houses and excellent schools, which continue to be a big pull factor for families.
Key to selling is sensible pricing. Serious buyers are generally in tune with the market. Similar to Michelin star restaurants, the best properties continue to achieve top prices, however those that dont tick all the boxes have to be priced competitively to even get speculative buyers through the door. There is a fine, and constantly, changing line between enough and too much, making it imperative to market a property at the true market value. For the best chance of achieving the best price, sellers should make the most of the fi rst few weeks of marketing a property.
As we move into mid autumn, smart sellers have been quick off the mark, making the most of the infl ux of new buyers. They also know that if they want to sell their property before Christmas they need to act now. In reality, there are just three months before the school holidays start. And every year, as soon as December 1st arrives, the industry (apart from us!) starts to wind down, including solicitors and the banks.
Property prices in Clapham, Battersea and Balham and indeed in prime London, have steadily increased this year but, as we enter a busier season, these rises should calm slightly. Property values will almost certainly not come down there is still too much demand. But the significant price rises we have seen over the past 18 months have now started to level off, which in my opinion, is healthy for the market as a whole.
If you'd like further insight, contact Sales Director firstname.lastname@example.org
Adam Stackhouse gives further insight into the buy-to-let market proving that this asset class remains a key priority for investors
There has been a notable resurgence in the buy-to-let market despite a pronounced shortage of competitive mortgage products and a harder qualification process for buyers. Surprisingly however, and with little warning, this area of the mortgage market has recently improved with a far greater number of products now available. Surely a sign that confidence is returning to the banking sector.
We have also seen an increase in the number of UK based, cash purchasers entering the market. The over 50s age bracket has reacted steadily to the continued decline in pension performance and have re-directed some of their personal wealth into London property. We have all heard of the bank of mum & dad helping their offspring with a house deposit, but this new breed of investor is somewhat different. Historically, they have been patient with their traditional asset classes, namely stocks and shares, yet rewarded with very little growth in real terms. Logically then, they are seeking opportunities that deliver both regular, annual income, alongside the potential for attractive capital growth. Indeed, 34% of new homes purchases this year were buy-to-let investments.
So what types of properties are these individuals targeting? For once, it is not the high end luxury schemes, popular with overseas investors and homeowners, and the reason for this is quite simply that many UK purchasers have been squeezed
out. High net-worth, foreign buyers have acquired almost half of all newly built property in prime areas of London, where there is great tenant demand and a much stronger potential for capital growth. The over 50s however, are choosing the more
boutiquey developments to invest their money. These style of properties are less about the lifestyle (they arent going to live in them after all) with no leisure facilities for example. Instead, its more about good quality property that will attract the best tenants, for the best rents. They typically live outside of London but more than likely, have previously owned a property in the capital, so have first hand experience of the capital growth that can be enjoyed.
They want to keep a fi nger in the London property market pie whilst also benefiting from a healthy rental yield. As with any property investments, we fi nd that much of the success is down to timing. As this rapid expansion of prime London continues, we are fi nding that intelligent, time-rich, UK domicile investors are intuitively spotting areas for future growth. They are targeting areas with renewed or extended transport links, local authority investment in quality open spaces and the value of properties in adjacent postcodes. All of these factors, if carefully analysed, reveal that savvy buy-to-let investors are still out in force, perhaps just a little smarter with their choices, as they target investment performance over glamorous postcodes.
If you'd like further insight, contact Head of Developments, Investments & New Homes email@example.com
Patrick Littlemore gives his view on the current lettings market in Balham, Battersea and Clapham.
As always at this time of year, we have seen a significant increase in activity in Balham, Battersea and Clapham, with more property coming onto the lettings market and equally, a rise in tenant demand. This demand is across the board, including families, corporate relocations, sharers and professional couples but it is the latter, especially in the 25-35 age bracket, where demand is the most insatiable. The Balham office in particular, is letting properties within 24 hours, where the property ticks the location box for professional couples needing an easy commute into the City. And quite simply, there is not enough property to go around. To secure the right property, tenants are signing contracts quickly, making offers in excess of the asking price and also agreeing to two-year minimum terms an attractive prospect for landlords, who will inevitably want to avoid future vacancy periods.
The Balham office has also seen an increase in the number of families looking for good quality houses in SW12. This represents an overspill from our Northcote Road office, where competition for houses between the commons is high and Balham is an excellent alternative, with far more choice, much more space and a slightly more attractive price-tag.
The Battersea office is renting a variety of property on behalf of a mixture of landlords. There will always be a number of portfolio landlords as well as long-term buy-to-letters who own one or two properties. But more recently, there has been an increase in the number of young professionals, safe in the knowledge that their one-bedroom property is a solid capital investment offering a good yield, choosing to keep their first home as a rental investment and buying again, further out of London. After all, there will never be a shortage of demand for one bedroom properties in the area!
Clapham has also seen the emergence of a younger generation of investors, who tend to work in the City. They are taking advantage of low interest rates and high rents to build a property portfolio of perhaps two to three rental investments, which achieve a yield of approximately 5%. They usually live in the area, so are familiar with the hot spots guaranteed to attract a great number of renters now and in the years to come.
For the properties that dont necessarily tick all the boxes, prices have stabilised. Compared to earlier this year, when we were seeing price rises of around 10% on all types of property, there is now more stock and comparatively fewer tenants. Currently, landlords can expect to achieve a minimum average rent increase to be in line with RPI on a renewed contract; a figure lower than the rental increases achieved earlier this year, but when you consider the 15-20% rental rises in the last two years, its still a great time to be a landlord.
I foresee the family market remaining strong, as there are more corporate tenants hunting than there is property to fill the gaps. And I believe while there's a lull over the summer, with everyone wrapped up in the Olympics and Royal celebrations, it is probably a good time to look for property. With the bulk of renters typically moving in between September and November, starting your hunt early in July or August while there's less competition could well pay off.
If you'd like further insight, contact Diirector of Lettings firstname.lastname@example.org