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Em Morley

East-West Divide Growing in Central London Property Market

Published On: October 5, 2015 at 11:58 am

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Property sales in the prime central London market increased in the month to September, but the general slow mood of the year is continuing, as higher Stamp Duty costs are causing buyers to become more reserved.

These are the messages arriving from Knight Frank’s latest sales index for the capital.

For the whole region, annual price growth dropped to 1.3%, the lowest rate since October 2009. However, prices fell by over 3% in some areas to the west of central London.

East-West Divide Growing in Central London Property Market

East-West Divide Growing in Central London Property Market

The data also reveals that new prospective buyers decreased by 34%, but viewings dropped by just 4%.

An east-west divide appears to have manifested around Hyde Park, with prices rising to the east, in Islington, the City of London, Marylebone and Mayfair, but falling in the west, in Notting Hill, South Kensington and Knightsbridge.

The report states that the divide is possibly due to a greater proportion of larger homes in the west, which are now affected by higher Stamp Duty.

Head of London Residential Research at Knight Frank, Tom Bill, comments: “Underlying demand remains strong but buyers have become more circumspect and stringent in their requirements due to the Stamp Duty increase.

“This heightened price sensitivity among buyers has resulted in a flight to quality, meaning demand is particularly strong for properties in the best condition and on a prime floor, street or square.

“So, while the anticipated gear change materialised as summer moved into autumn, there was no sense the market is entering full-blown recovery mode after what has been a subdued 2015.”1

Director of W.A. Ellis, Richard Barber, adds: “Transaction levels have been down throughout the spring and summer months and, whilst some of this reduction may have been due to election jitters, it is now apparent that the increase in Stamp Duty is the main driver behind this trend.

“Whilst the Government may not wish to admit that HMRC’s Stamp Duty revenue has diminished by £1.5 billion in the first six months of 2015, compared with the previous six months, it is unlikely that George Osborne will reduce the new levy at this stage in the political cycle.

“With lower transaction levels across prime central London, it is clear that quality is a priority for buyers, notably, the most recent transaction within our prime central London postcodes have all been properties of the highest quality with exceptional attributes.”1 

In the lettings sector, Knight Frank reports that annual rental growth fell to 2.4% in September, the lowest figure since September 2014.

This decline is thought to be the result of contagion from the Chinese economic crash, with firms more hesitant to recruit or spend on relocation for senior executives.

This has caused the number of agreed tenancies in the three months to August to fall by 5.9% over the year and the amount of viewings to decrease by 10.2%.

Knight Frank expects this trend to continue in the short term.

However, the report found that the trend is less clear in the lower and higher price ranges, with demand among young professionals remaining strong, but demand in the super prime market of £5,000 per week and over has “been buoyed by the fact tenants have moved across from the sales market due to the Stamp Duty increase”1. 

1 http://www.propertyindustryeye.com/stamp-duty-changes-create-eastwest-divide-in-prime-central-london/

 

Landlord with £5m Debt Believed to Have Killed Himself

Published On: October 5, 2015 at 11:01 am

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A landlord who allegedly had debts of £5m is believed to have killed himself.

Police found the body of Charles Cole, 50, at his home in Devon, after concerns were raised for his wellbeing.

Landlord with £5m Debt Believed to Have Killed Himself

Landlord with £5m Debt Believed to Have Killed Himself

Cole operated an 84-property lettings business, with homes in Yorkshire, which he began in 2000.

By 2007, Cole and his wife, Iona, owned luxury cars and their home, bought mortgage free for £600,000 in 1998 by profit made from refurbishing a house left to them by Cole’s father, was worth £2.25m.

However, this lifestyle fuelled financial trouble, when Cole sent his three eldest children to public school and his youngest to prep school.

The couple apparently paid £100,000 per year on school fees and were laden with the cost of maintaining their 214-acre manor house.

In 2007, Cole invested in a Romanian property project, due to be developed into a luxury housing complex for Bucharest professionals.

But the scheme never manifested and the couple were left with nothing. The children were taken out of school, and home educated.

At the time, Cole said: “I feel like a man castrated – unable to do what I should for my family. My naivety has destroyed the plans I had for my children.”1

It is unknown whether the family’s debts were ever cleared, but they began a glamping business earlier this year, with campers paying £170 a night to stay on their land.

Cole’s body was discovered on 22nd September in the grounds of his home.

A Devon and Cornwall Police spokesperson says: “Police were called at around 1.40pm on Tuesday, September 22nd. The caller was concerned for the welfare of a 50-year-old man from Crediton.

“Officers searched a property in Poughill, Crediton, where the body of a man was found within the grounds.

“His family have been informed. The death is not being treated as suspicious.”1 

1 http://www.propertyindustryeye.com/landlord-saddled-with-debt-shoots-himself-dead/

ARLA Insists Rent Controls Will Not Help Tenants

Published On: October 5, 2015 at 9:54 am

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Rent controls will do nothing to help tenants, insists the Association of Residential Letting Agents (ARLA).

ARLA Insists Rent Controls Will Not Help Tenants

ARLA Insists Rent Controls Will Not Help Tenants

ARLA made this claim in response to questions from the London Assembly Housing Committee, which asked: “Which rent stabilisation measures do you think operate effectively in other countries?” and “What more can the Mayor do to support the development of build-to-let and commercial landlords?”

ARLA replied by stating that it is not in favour of rent controls, as similar measures in other countries have often led to tenants being left with much higher expenses.

Managing Director of ARLA, David Cox, says: “Fundamentally, ARLA is not in favour of introducing rent stabilisation measures in London.

“In March, we surveyed our members and nearly three-quarters of them said that rent control, longer tenancies and less freedom to evict tenants will not benefit tenants in reality.

“We’ve looked at Germany, which is often viewed as one of the best examples of rent stabilisation in the world, but there are large costs involved for tenants, as most properties are let bare without a kitchen or bathroom.”

He continues: “In addition, in Belgium, they have longer minimum tenancies lasting between three and five years, which simply wouldn’t work in London where the fluidity of people coming and going for short periods is a common occurrence.

“The challenge in London remains to find new, imaginative and additional ways of delivering good homes in safe and friendly neighbourhoods for prices people can afford.

“We think that the Stamp Duty raised from London property sales should be kept in London to invest in more housing and we would like to see the London Rental Standard become mandatory across the private rented sector.”1 

1 http://www.propertyindustryeye.com/arla-says-rent-controls-could-lead-to-even-more-expense-for-tenants/

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Homebuyers Pay Up to £300,000 More for a New Build in London

Published On: October 5, 2015 at 8:50 am

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Homebuyers are paying premiums of up to £300,000 for new build homes in London, according to the latest research from LonRes, property data analysts.

The most expensive new homes, compared to similar second-hand properties, are in King’s Cross. The average price of a new build here is £868,657 compared with £584,919 for a property that has already been lived in. This is a difference of almost £300,000.

Fulham Riverside’s average apartment price is £1,063023, compared to £727,364 for a second-hand home, a difference of £335,659.

Homebuyers Pay Up to £300,000 More for a New Build in London

Homebuyers Pay Up to £300,000 More for a New Build in London

The study compared the price of new and used flats sold in ten key London redevelopment areas in the past year and discovered significant premiums in all spots. The smallest premiums, at 27%, were found in Earls Court and Woolwich.

Head of Research and Data Analysis at LonRes, Marcus Dixon, reports that in the last five years, the price of new flats has soared, surpassing the values of older properties.

He says: “The average value achieved for new flats sold across Greater London has increased by 70% in the past five years, compared with 31% for second-hand flats.

“Much of this increase in achieved prices has been the result of more luxurious developments in higher-value areas of London, with a handful of new developments in prime central London achieving more than double the amount per square foot than neighbouring properties on the second-hand market.

“Five years ago the average price of a new build flat sold across Greater London was 5% lower than the average value of second-hand flats, by this year the premium for new flats had risen to 24%.”1 

Jo Eccles, Managing Director of buying agent Sourcing Property, notes that new build homes are often larger and better laid out than period conversions.

She explains: “One-bed flats in new build schemes tend to start at around 530 square foot, whereas one-bed flats in period conversions start from around 450 square foot.

“These types of properties are very popular with downsizers; we work with quite a lot of older clients who are selling their family houses and buying in new schemes in order to minimise stairs and benefit from a lift and porter, plus they often don’t want the additional work of maintaining a garden.

“We also see parents investing their money in new build flats while their children are very young so that they can let it out hassle-free and almost forget about it until their children grow older, then sell the property and help them get on the ladder.”1

Founder and Managing Director of Johns and Co – specialists in selling new build properties – John Morley, points out that new homes are generally more energy efficient and therefore cheaper to run than older homes. He also mentions that as the market is growing, a new build property can be worth more than it cost by the time the sale is completed.

Regarding investments, Merton Croisdale-Appleby, a director of Maskells estate agents, says the best buys are in developments where supply of new homes is limited: “In areas where large numbers of new builds are under construction, with continued new stock on the horizon, it can lead to better value opportunities for those buying second-hand.”1 

1 http://www.homesandproperty.co.uk/property-news/news/homebuyers-are-paying-record-ps300k-premiums-live-new-build-flats-10-key-london-areas

 

 

 

Four Good Value Commuter Towns Linking to Euston

Published On: October 4, 2015 at 2:24 pm

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Euston is London’s oldest railway station, but today it is one of the capital’s most important hubs, with over 30m passengers travelling through every year.

This number is set to rise once the HS2 arrives, which will make commuting much quicker.

There are 11 stations between Euston and Rugby that are within one hour’s journey time to London. Here are the best four:

Rugby 

Commuters that don’t want to give up on the urban lifestyle can enjoy the Warwickshire town of Rugby, where journeys to the capital take under an hour and house prices are affordable.

It has experienced steady price growth in the last 12 months. The average house price is £193,212, up by 8.8% over the past year. An annual season ticket to Rugby costs £5,640 and the journey takes 50 minutes.

Although home to the independent school where rugby was first played in 1823, Rugby’s state education is also good.

A two-bedroom Victorian terraced house close to the train station costs around £130,000-£135,000, while a six-bedroom detached Victorian property five to ten minutes south of the station would cost between £500,000-£600,000.

New builds will attract first time buyers, while the pretty surrounding villages, such as Dunchurch, are perfect for those seeking a country lifestyle.

Berkhamsted

Berkhamsted, Hertfordshire has witnessed the strongest recovery since the recession, with prices growing by 20.5% since 2007, to an average of £433,203.

Commuters will be attracted to its short journey to central London, just 30 minutes with a £3,676-priced annual season ticket.

Head of Savills in Harpenden, Nick Ingle, comments: “Berkhamsted has got the whole package.

“It offers a really fast commute and you get a seat on the train.

“Plus the high street is historic and attractive. It has got a Waitrose, a huge M&S food hall and some lovely boutiques, restaurants and shops – all the trappings for the London buyer.”1 

Berkhamsted is surrounded by beautiful countryside, including the National Trust’s Ashridge Estate.

Homes in the town centre are predominantly Victorian, and Ingle estimates that a two-bed cottage costs around £350,000-£400,000.

Four-bed homes are priced about £750,000 and on the outskirts, a five or six-bed detached property can cost more than £2m.

Milton Keynes

A recent report from CBRE property consultants ranks Milton Keynes as one of the most resilient markets in Britain. The post-war new town is the fastest-growing area in Europe, with its population forecast to grow by 8% in the next five years, which equates to 13 new residents every day.

Branch Manager of Taylors Executive Homes, Robert Hodgson, says: “Our average sale time is 22 days from bringing a house onto the market to agreeing an offer.

“The market is taking off and a lot of it is about people moving out of London and places such as St Albans, where prices are higher.”

Despite being relatively new compared to other towns, Milton Keynes has a wealth of culture, including a theatre, art gallery, outdoor music venue, indoor skiing centre and an orchestra. The gardens at National Trust Stowe are also pleasant and the town centre boasts over 400 shops.

Ofsted has rated two schools, Castlethorpe First School and Oakgrove, outstanding.

The commute to London is 35 minutes and an annual season ticket is £4,888.

A four-bed period house in a neighbouring village costs around £500,000. For younger buyers, two-bed flats in the centre cost between £180,000-£200,000.

Bletchley

The location that has experienced the strongest annual price growth is Bletchley, where prices rose by 14.3% to an average of £197,061. The journey time to London takes around 39 minutes and a season ticket is £4,228 per year.

Although Bletchley does have some Victorian housing stock, the majority of its properties were built as council homes in the 1950s.

Local schools are variable, but St Thomas Aquinas Primary is rated outstanding.

Three-bedroom, semi-detached, Victorian homes can be found for £250,000.

The town has recently been regenerated, including improvements to its high street, station and parks. And a Hollywood movie is making the area attractive to buyers.

Hodgson explains: “The Imitation Game – the film with Benedict Cumberbatch and Keira Knightley about Second World War code breakers at Bletchley Park – has brought a bit of good publicity to Bletchley.”1

1 http://www.homesandproperty.co.uk/area-guides/uk-areas/rugby-berkhamsted-milton-keynes-and-bletchley-four-good-value-commuter-towns-direct-links-euston

 

 

The Growing Trend of Flat-Sharing in Your 40s

Published On: October 3, 2015 at 4:09 pm

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The amount of people having to flat share into their 40s has spiralled recently, with data showing a surge in renters priced out of buying a home and living with strangers instead.

Between 2009-14, the number of flat-sharers between 35-44-years-old increased by 186%, according to SpareRoom.co.uk, the UK’s biggest flat share website. Furthermore, the amount of sharers aged 45-54 rose by a huge 300%.

Most of those forced into flat sharing are locked out of homeownership by soaring prices, but they have also found that renting alone is unaffordable. The average rent price in Britain has grown by 10.5% in the last 12 months, much further than the rise in earnings. The typical rent in London is now £1,558 per month, and just under £1,000 in most parts of the south.

Tenants spend an average of 50% of their earnings on rent, rising to 72% in the capital.

Alex Forsey, a 44-year-old photographer, has recently moved into a house in Clapton, East London, with three other people in their 20s to 40s

He explains his predicament: “The most affordable one-bed flat I was shown was £1,200 a month, and it was worse than a squat. The agent tried telling me it was a bargain.”

Although he calls his flatmates “lovely people, very warm and welcoming”, Alex says sharing a home at his age leaves him feeling anxious and unsettled.

He’s infuriated by claims that renters splash their cash on holidays and smartphones rather than saving for a deposit. He insists: “It’s absolute rubbish. I have not had a proper holiday in two years. I get quite well paid, but I’d have to put £40,000 down as a deposit for one of the tiny boxes that developers are putting up in London.”1 

Half of tenants in the UK do not believe they’ll ever be able to afford their own home, according to a recent Post Office survey. And a study by Asda found that a third of renters have argued with their flatmates over issues such as not paying rent or bills on time, allowing cats into the home and stealing clothes.

Rachel Churney, 41, opted for a flat share when she moved to London for her job.

Early in her career, she was able to buy in the north, but she soon found that not only could she not buy in the capital, renting alone was also unaffordable.

Rachel found a two-bed flat in New Malden, southwest London, which accepted her pet dog. However, she needed to find a flatmate so that she could afford the rent.

She remembers: “It means you have to go on to websites and find a complete stranger to live with.”

Her first flatmate was ten years younger than her, and although being “a lovely person”, Rachel soon found that her maturity meant she was put in charge of organising the bills and other tasks.

She is concerned about her constant insecurity compared to homeowners. She explains: “I’ve been told by the landlord that they want the property back and we have to move out in January. I’m probably going to have to almost bankrupt myself and get a place of my own. Even then, I know the maximum security I’ll have is one year.”1

Campaigners blame a serious lack of house building for this increase.

Generation Rent’s Dan Wilson Craw states: “The failure of governments to build enough houses is forcing more people to make compromises in order to afford a roof over their head. For some, sharing is a lifestyle choice, but many others would prefer their own place, especially if they wanted to start a family.

“As long as house prices and rents keep rising, more of us will face years of arguments over whose turn it is to buy the loo roll.”1

However, some really do enjoy sharing. Charlotte Ashton, 34, and Jannine Leadbetter, 43, live in a two-bedroom flat in Chiswick, West London.

Charlotte says: “I’ve shared all my adult life and have been in my current flat with my lovely housemate, Jannine, for two-and-a-half years. We are both not in a position to buy, as London prices, especially Chiswick ones, which are now £1m-plus on average, are just too high, and we’ve got caught in the trap of renting a beautiful flat with a direct Thames view, so buying – unless we won the lottery – would inevitably be a downgrade.”

Before they moved in, the two women had never met. However, Charlotte’s experience of flat sharing meant that she knew within five minutes if it would work.

She explains: “What’s vital is that we each have our own space. We’ve never argued or even squabbled over anything. It’s all about respecting each other. But the real key is making sure you have a cleaner.”

She adds: “I also enjoy the flexibility. At short notice I can just bugger off abroad if I want to.”

But Charlotte is no closer to buying, as she observes: “When I first moved in, the decent two-bed flats in Chiswick were £375,000. Now, they are £495,000.”1

But flat sharing into your 40s is not just a problem for Londoners, according to EasyRoommate.com. The flat share website found that among its advertisers seeking flatmates, the proportion aged over 40 is higher in Birmingham than London.

Chief Executive of housing charity Shelter, Campbell Robb, reports: “With our housing market out of control and rents sky high, it’s sadly no surprise that more and more people are finding themselves trapped in insecure flat shares well into their 40s.

“Government schemes like Help to Buy are only pushing up house prices even further and not doing anything to help those who really need it. The autumn spending review is the Government’s last chance to show it is serious about solving this crisis, by investing in the genuinely affordable homes we desperately need, and giving renters back the chance of a stable home.”1

1 http://www.theguardian.com/money/2015/sep/25/flatsharing-40s-housing-crisis-lack-homes-renting-london