On the Market - Fulham, Autumn 2012
Thu 20 Sep 2012
Alex Lyle gives his expert view on the Fulham property market...
The summer months always present a slowdown in the market and 2012 was no different. The fi rst quarter of the year saw huge, record-breaking price increases in Fulham a result of the continued uncertainly in the eurozone, coupled with the imbalance of supply and demand. Added into the mix this year were the Diamond Jubilee and Olympic games which, with some transactions, acted as a catalyst for both buyers and sellers keen to seal the deal before the summer celebrations started.
This was reflected in the number of buyers per property reducing from 16.29 in Q1 this year to 15.39 in Q2. However, whilst the distraction of the Olympics took its toll on speculative buyer demand, sales activity during the fi rst few weeks of August actually increased by 23% compared to the same period last year and 35% higher than that of 2010. So, despite a decrease in buyer registrations of almost 30%, those buyers actively looking, wanted to take full advantage of a less competitive time of year, compared to the busy autumn. And with the number of buyers per property in September rising to 18, it looks like this was a wise move.
In order for any property market to perform effectively, it is essential that it is not just the middle and top of the ladder where transactions take place, it must also be at the bottom if there is nobody to sell your house to, you cant move. So how does Fulham continue to overcome this? There are several combined factors that enable the market to out-perform other areas including prime central London; in fact, transaction levels for the year to the end of August were up 20% on the same period in 2011.
Firstly, the Bank of Mum & Dad. In addition to those who manage to secure mortgage finance, its clear that in Fulham, many first-time buyers are supported by their parents. The baby boom generation is hitting retirement age, thick and fast. With
traditional banking products and annuity rates offering poor returns, Fulham property offers a great alternative investment, at the same time as enabling parents to help their offspring. Thus, any shortfall at the bottom of the ladder from conventional(un-aided) first time buyers is replenished, ensuring the cogs further up the chain continue to move in the right direction.
Secondly, buy-to-let investors. The area continues to be a favourite amongst investors, both domestic and foreign, who can confidently expect yields in the region of 5%. For example, we have just sold a property on Stephendale Road to French buyers, who exchanged contracts in three weeks, at the full asking price. With the agreement of the existing owner, they then instructed to us to find tenants for the property, which we did, again at the full asking price, fixed for two years - the
amazing fact is, the property sale hasnt even completed! This method of avoiding vacancy periods is becoming more commonplace.
As we move into mid autumn, its clear that those buyers who took time out to enjoy the summer are back in force; new buyer registrations are up too. Smart sellers know this and have been quick off the mark. They know that if they want to sell their property before Christmas they need to act now. In reality there are not many weeks to go and every year, as soon as December 1st arrives everyone (apart from us!) starts to wind down, including solicitors and the banks.
Despite huge demand, the key to achieving the best possible price is sensible pricing. Serious buyers are generally in tune with the market, specifi cally with the values of properties in their areas of choice. Like 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 (constantly changing) line between enough and too much, making it imperative to market a property at the true market value rather than a value designed to flatter the seller; if the latter approach is adopted, any chance of achieving the best price is likely to fail.
Looking ahead, we expect the market to remain much the same over the coming months and in the run up to Christmas. Despite a healthy increase in new buyer registrations, we are also seeing an increase in valuations of stock and instructions, which is likely to keep the Fulham market in check, with marginal increases in prices as buyers compete to snap up their dream property before 2013.
Contact Fulham Sales Team on:
T 020 7736 9822
The Olympics have come and gone, but their effect on the rental property market continues into the autumn
Prior to the Olympics, a number of landlords served notice on their tenants in the hope of securing a lucrative Olympic-let and its true to say, we let some incredible properties for great premiums. However, demand for short lets during this period was not as exciting as some had expected. So, as the Olympiclets come to an end and the landlords who missed out re-market their properties, there is inevitably more rental property on the market. This is of course, added to the already high volume of property that naturally comes onto the market at this time of year.
So whilst there is now a good selection of property for rent; the same can also be said for the large number of great quality tenants registered with our Fulham office. Demand from tenants is across the board families, corporate relocations, sharers and professional couples are all seeking property in the SW6 area.
In recent weeks, we have noticed a significant increase in the number of relocation agents searching in Fulham, with more relocatees simply seeking a new life with their partner or family in London (rather than relocating with a company), which is particularly true for the large number of French families attracted to Fulham by the four excellent, nearby French schools. We also work with a number of London based, international companies via our Corporate & Relocation Services department, many of which placed a three-month embargo on London relocations in anticipation of high rental hikes and challenging moving conditions during the Olympics. The lifting of this embargo would almost certainly account for the increasing enquiries from relocation agents in the capital, looking to secure property on behalf of excellent corporate tenants.
Ordinarily, at this time of year, we would expect a slow-down in tenant enquiries from the family market. However, despite the school term being well under way, there are still many families searching for rental property in Fulham, who waited until the Olympic torch had long been extinguished before starting their search. They are specifically looking for good sized houses on the Peterborough and Moore Park Estates and are in a position to move quickly. We expect this demand to ease as
we go further into the autumn market.
Demand for one-bedroom flats in Fulham is insatiable and it is taking, in most cases, less than 24 hours to let these properties, especially if they have a garden. Fortunately, we are taking on an increasing number of one-bedroom fl ats from young
professionals who, wise to Fulhams rental appeal, are deciding to keep their first property as a rental investment. They know that Fulham is, and always will be, a popular rental haven with great returns and a capital appreciation to rival some of Londons most sought after addresses.
Whereas earlier this 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 expect an average increase of 2.5% on a renewed contract; a figure lower than the rental increases achieved earlier this year, but when you consider the 15-20%, on average rental rises in the last two years, it is still a great time to be a landlord.
Contact Fulham Lettings Team on:
T 020 7371 7748