Posts with tag: London

10 Things to Keep in Mind if You’re Buying in London Post-Brexit

Published On: October 14, 2016 at 10:56 am

Tags: Brexit,London,property investors,property market

If you thinking of buying a property in London post-Brexit, the Regional Director of Portico London estate agent, Mark Lawrinson, has ten things to keep in mind to make a sound property investment:

Look out for big infrastructure projects

Even in a weak or unstable market, locations undergoing large infrastructure investment are likely to still experience growth in both rental yields and capital gains. Landlords should look to areas being transformed along both the Night Tube and Crossrail lines to identify long-term investment prospects. For example, Forest Gate, Farringdon and Whitechapel are areas set for regeneration and a rise in property prices thanks to the Crossrail service.

Check out the high street

The high street is a great indicator of the demographic of an area and shows whether the area is in decline or has growth potential. Some of the factors you should look at are: Have there been many changes recently? Are shops closing down with no sign of opening, or are they closing with new names moving in? Is the council spending money to smarten it up?

Find good schools

10 Things to Keep in Mind if You’re Buying in London Post-Brexit

Another great way to judge the prospects of an area is the schools in the vicinity. While you may not want to rent to tenants with children, the London population is growing fast, and good schools are becoming more difficult to come by. Therefore, having a good school in the area is a big bonus. People both rent and buy in these catchments to get their children into a good school, which gives you a good return on investment.

Look for a home

If you are buying a property to live in, remember that it’s a home first and investment second. If you plan to live in the property long-term, you should be shielded from bumps in the market. As the London property market has proved itself to be resilient, what happens in the next two years could be completely insignificant if you are there for ten.

Shop around for mortgages

To make a successful investment decision, you should use a broker who has access to the entire market. Be aware that some brokers operate on a panel, which means that when they say they’re getting you the best deal, they are only getting you the best deal from their panel. With lending criteria changing daily, it is advised that you shop around. This is true even for landlords who’ve used the same lender or broker for years.

Choose a good solicitor

If you choose a cheap solicitor, they may end up costing you more. Buying a property is one of the single biggest purchases of your life, so getting the right advice is crucial. With a market that’s changing daily, avoiding delays with the right legal aid could be the difference between completing the transaction or missing out.

Pick the right estate agent

In a tough market, it is more important than ever to pick a local estate agent who knows the area inside out and who will get you the best result as a buyer and a seller. An agent who just instructs and advertises your property and waits for the calls will struggle in a difficult market. A proactive agent who knows their buyers can match the right person to your property, and uses past experience to price your home right. With a no-sale, no-fee policy, high street estate agents now have as much a vested interest in the transactions as the vendor and buyer.

Create a two-year and five-year plan

Most investors would take a two-year fixed rate mortgage, but with lending criteria getting tougher for landlords, some of the better deals in terms of loan-to-value (LTV) can be found at a five-year fixed rate deal. No one knows what will happen to the property market over the next two years, so you must plan for what will happen if circumstances go out of your control.

Add value to your property

From basic redecoration to new kitchens and even structural work, such as loft extensions, adding value to your property will make your home a better investment. If you’re looking for capital growth, not market-dependent, then you must look at innovative ways to add value to your property.

Be clear on your requirements

We all know what we’re looking for in a property, even those seeking investments, but you must remember to be realistic with your actual needs. Always compromise where necessary to make your search much easier.

Official Statistics Prove that Housing Crisis is Spreading

Published On: October 10, 2016 at 10:53 am

Author: Em Morley

Categories: Property News

Tags: average house price,house prices,housing crisis,London

New official statistics from the Office for National Statistics (ONS) prove that the housing crisis is spreading to many cities across the UK, not just London.

The ONS has used its house price statistics to explore the housing market across the UK. The most recent complete data ranges to the end of 2015.

The median price paid for residential property in England and Wales was £207,500 in 2015, up by £12,500 (6.4%) on 2014. This was largely driven by a 7% annual increase in England, while growth in Wales averaged just 2%. The median price paid for property ranged from around £77,000 in Blaenau Gwent to almost £1.2m in Kensington and Chelsea.

Official Statistics Prove that Housing Crisis is Spreading

The majority of local authorities in England and Wales recorded an increase in median price between 2014-15. The median price decreased in eight local authorities, five of which were in the North West, two in Wales and one in London. There was just one London borough where the median price decreased over this period – Kensington and Chelsea. The ONS believes that this is likely the result of higher Stamp Duty rates on the most expensive properties from the end of 2014.

The data shows that the gap between the median price paid for properties in regions with the highest and lowest prices has become wider over time.

This gap is largely the result of the steeper increase of house prices in London, reports the ONS. Between 2014 and 2015, London recorded an average house price rise of 9.6%, while an average increase of just 5.5% was seen in the North East.

In 2015, Barking and Dagenham had the lowest median house price in London, at £245,000. Although this was the cheapest price paid in the capital, it was higher than two-thirds of all local authorities in England and Wales, reflecting generally higher housing costs in London and its surrounding areas.

Since 2007, the median price paid for properties in the most expensive 10% of England and Wales has soared by 37.6%. Over the same timeframe, there has been a decline in median house prices for properties in the least expensive areas, of 3.9%. ONS believes that there are many factors that may cause changes in house prices, including average earnings and the rate of population change. When there is higher demand for owner-occupied housing in a certain area, house prices tend to rise at a faster rate than in areas where demand is lower, says the report.

The ONS claims that local authorities in which the population has increased the most in one year typically have a larger increase in house prices the following year.

While the population of England and Wales has risen steadily over time, this is not the only factor that pushes up demand for housing. One factor that affects housing demand is the characteristics and composition of residents in households. In 2015, people living alone occupied 28.6% of all homes in the UK. This can contribute to rising house prices, which in turn makes it more difficult for young people to purchase homes.

Commenting on the recent report, the Senior Research and Policy Analyst at the Resolution Foundation, Lindsay Judge, says: “Today’s ONS figures confirm that the housing crisis facing Britain is about much more than the inability of younger people to buy their own home. Housing is becoming less affordable. Homeowners and renters alike are seeing more of their earnings eaten up by accommodation costs, undermining living standards for millions. And while London remains the outlier in terms of costs, this housing crisis has now spread to cities across the country.

“While there has been a slight uptick in the number of new houses built this year, we are still falling well short of the levels needed to make housing genuinely affordable again. It’s encouraging that the Prime Minister has put housing at the heart of her Government’s plans. We now need to see the Government roll up its sleeves to meet its target of one-million homes built this Parliament.”

Where to Find Fixer-Upper Investment Properties in London’s Commuter Belt

Published On: October 10, 2016 at 9:39 am

Author: Em Morley

Categories: Landlord News

Tags: commuter belt,investment properties,London,property investors,renovation

With London house prices holding strong, many homeowners and investors alike are looking out of the capital for better value properties. Home improvement marketplace Plentific.com has found great locations where you can buy fixer-upper investment properties in London’s commuter belt for a good price.

The average house price in London is now a huge £484,716, while the typical property in the UK costs less than half, at £216,750.

Although it is no surprise that Londoners are looking to buy in more affordable commuter towns, property values in the outskirts are beginning to rise as a result of the added interest.

Where to Find Fixer-Upper Investment Properties in London’s Commuter Belt

So where can you find reasonably priced investment properties in London’s commuter belt? Plentific advises you to look for fixer-upper properties and make the necessary improvements to bring it up to a high standard.

The Co-Founder of Plentific, Cem Savas, says: “These five examples demonstrate what can be achieved with a budget which is modest when compared to the London property prices. Any London homeowner can exchange their flat for more than twice the space with a similar commute time. Furthermore, with some TLC and an expert pair of hands, carrying out renovations can develop these properties into beautiful family homes.

“With the rapid increase of property values in London, homeowners can now sell a studio in Balham for a townhouse in Bedfordshire, or trade in their maisonette in Edgware for a cottage with grounds in Buckinghamshire.”

So where should you look?

Bicester, Oxfordshire

With two local stations offering direct trains to London in less than an hour, Bicester is extremely commuter-friendly. The combination of its local shopping centre and beautiful countryside attract many to the town, while the latest train station, Bicester Village, is currently undergoing construction of a new train line, which will provide a direct service to Oxford by the end of 2016.

Leighton Buzzard, Bedfordshire

With Milton Keynes just around the corner, offering great entertainment and shopping amenities, Leighton Buzzard is fast becoming a favourite commuter hotspot. The town offers its own local attractions and restaurants, and is just a half an hour drive from Luton Airport.

Didcot, Oxfordshire

Didcot is currently undergoing a major facelift; properties are under development in the Great Western Park, the train station is being upgraded, and the shopping centre is being extended. It is just 20 minutes from Oxford and 50 minutes from central London.

Southend-on-Sea, Essex

If you’re looking to invest by the sea but still want to attract to London commuters, Southend-on-Sea could be a great investment option. It has a beach resort feel and is under an hour from the capital.

Maidstone, Kent

Looking to invest in the countryside? Maidstone has an abundance of greenery on its doorstep, is home to the stunning Leeds Castle and is still within an hour’s commute of London.

Have you been inspired to step into London’s commuter belt for your next investment property? Buy a fixer-upper and reap the rewards!

Homeowners Could be Better Off Commuting to London by Plane than Buying in the Capital

Published On: October 10, 2016 at 8:56 am

Author: Em Morley

Categories: Property News

Tags: commuting,homeowners,London,property market

Homeowners living in some cities around the UK could be better off commuting to London for work by plane, rather than buying in the capital, according to the latest research by online estate agent eMoov.co.uk.

Low-cost domestic air travel in the UK makes it cheaper to fly than catch a train to some cities, but it could actually be cheaper to fly to London than live in the capital’s sky-high housing market.

eMoov analysed eight cities outside of London with direct flight paths to the capital, finding that seven of them offered an annual mortgage saving when homeowners commute by plane.

The agent compared the average house price between the capital and other short-haul destinations in the UK with a direct service to London. It then calculated the total cost of a weekly commute – flying on the Monday morning and returning on the Friday evening – plus four nights’ accommodation (either at or close to the relevant airport) when booked six months in advance.

eMoov then divided the number of working days in 2017 (252 minus 22 days’ holiday) by five, to find the number of working weeks in the year (46), before multiplying the cost of weekly travel and accommodation by this figure.

Finally, it worked out the average mortgage cost after deposit and the annual payment for both London and the other locations, subtracting the cost of travel and accommodation from the difference, showing which cities homeowners would be better off living in and commuting to the capital by plane, rather than buying in London.

Homeowners Could be Better Off Commuting to London by Plane than Buying in the Capital

The city offering the greatest annual mortgage saving was Glasgow. With an average house price of just £155,195, the annual mortgage saving compared to London is £21,275. The cost of a weekly round-trip to London is just £52.98 via Ryanair for an 80-minute flight, with accommodation taking the total to just £204.98 per week, or £9,429 a year. It would take 47 years of travelling at this cost before the difference between the average house price in London and Glasgow was bridged. When taking travel and accommodation costs into account, homeowners in Glasgow would still be £11,845 better off a year.

Despite its troubled past, Belfast is fast becoming a go-to city for culture and tourism, and offers the second cheapest option for commuters flying into London. A year’s worth of travel and accommodation would set you back just over £8,000, while the annual mortgage saving falls just short of £20,000 when compared with London, resulting in an annual saving of £11,547 for another 80-minute flight into the capital.

Manchester is the best option for those wanting to remain in England, and is the third biggest saving across all eight cities researched. At £162,970, it is home to the second lowest average house price, while a BA flight takes you to Heathrow in just 65 minutes. Travel and accommodation would cost £12,334 per year – when subtracted from the annual mortgage saving, homeowners in Manchester would save £8,564 a year.

A similar commute from Leeds could result in an annual saving of £7,670 for homeowners in the Yorkshire city, where travel and accommodation would cost £12,150 a year.

Although the flight times from Newcastle and Edinburgh are slightly longer, at 85 minutes each, homeowners opting to spend less on property and commute to London by plane could save over £7,000 per year in both cities.

The city offering the lowest saving is Newquay, where the average house price is £240,164. Commuting by plane to the capital would result in an annual mortgage saving of £5,498, meaning it is possible to surf at the weekend and work in London during the week!

There was just one city out of eight outside of London where homeowners would be worse off by commuting by plane. With an average house price of £259,221, the cost of a mortgage after deposit in Exeter is £233,298. When compared to London, the annual mortgage saving is £16,234.

However, the return flight from Exeter to London City Airport is the second most expensive of the eight cities (£115), while the cost of staying around the airport is also the most expensive of the lot (£320 per week). As a result, the total cost hits £20,055 per year, cancelling out the mortgage saving and making Exeter homeowners £3,820 worse off.

The Founder and CEO of eMoov, Russell Quirk, comments: “With London property prices continuing to push aspirational buyers further and further out of the capital, there’s no telling where we might be in ten years’ time in terms of the commute people will consider if prices continue to climb from the inside out.

“Luckily, the increasing improvement of transport infrastructure across the nation has made commuting larger distances more manageable. We’re not saying commuting by plane is an option for everyone, and there are other time requirements to consider in terms of checking in on time. However, as with all new commutes, you soon adapt, and if it was a choice between 80 minutes stuck on the Central Line at rush hour, five hours on a train from Cornwall, or an hour or so gliding through the clouds, I know which one I would pick.”

He continues: “When you also consider that you could live in the likes of Glasgow or Manchester, where the cost of living and buying is dramatically lower, but still earn a London wage, it seems even more attractive. Couple this with the fact that many companies may even foot the travel or accommodation costs, and the savings continue to rise.

“Not only this, but the continuing innovation of technology is helping to improve almost every area of industry and allows many to work remotely, meaning that the standard nine-to-five isn’t always spent in the office, with many working from home every other week. So surfing on the coast of Cornwall at the weekend whilst working in London during the week could very well be viable.”

Would you rather commute to the capital by plane than buy into London’s sky-high housing market?

Shoreditch is the Most Affordable London Location for Literature Lovers

Published On: October 6, 2016 at 11:07 am

Author: Em Morley

Categories: Property News

Tags: house prices,literature,London,Shoreditch

Shoreditch has been named the most affordable London location for literature lovers to move to, as estate agent Marsh & Parsons analyses the backdrops of famous books.

With the London Literature Festival taking place at the Southbank Centre from 5^th-16^th October, the agent has scoured the shelves for novels set in the capital, looking at the average house prices in the locations mentioned.

Shoreditch is the Most Affordable London Location for Literature Lovers

The trendy neighbourhood of Shoreditch was the most affordable area committed to ink, where the average house price stands at £729,807. The area was most famously included in Monica Ali’s 2003 hit Brick Lane.

Other parts of east London have also gained literary fame, such as London Fields in Martin Amis’s murder mystery of the same name in 1989, and Peter Ackroyd’s The Clerkenwell Tales in 2003.

At the opposite end of the spectrum, Notting Hill was named the most expensive location mentioned in famous stories. Property in the exclusive district is worth an average of £2,071,429 – a far cry from the Notting Hill portrayed in Samuel Selvon’s 1956 novel, The Lonely Londoners, in which “the Gate” is described as a down-at-heel area where newcomers could find cheap lodgings.

Particularly pertinent, following the release of the third film, is the Bridget Jones series. Before Helen Fielding’s newspaper columns were turned into novels and then films, the British heroine lived in Holland Park (not Borough, as the films would suggest). With typical house prices in the area now exceeding £1.5m, the character maybe wasn’t as doomed as she let on…

London has provided the backdrop for thousands of novels over the years, with other notable mentions including: North Kensington (in 1959’s Absolute Beginners by Colin MacInnes) where the average price is £1,373,036; Westminster (in Virginia Woolf’s 1925 novel Mrs Dalloway) at £1,353,750; Clapham (in Graham Greene’s The End of the Affair from 1951) at £987,286; and Balham (in the 2001 novel Atonement by Ian McEwan) at £801,667.

Literary legends Charles Dickens and George Orwell set many of their famous novels in the streets of London, while in more recent years, Nick Hornby, Sebastian Faulks and Zadie Smith have used the capital as a backdrop in their stories.

London’s stations also feature prominently in literature, most famously Michael Bond’s Paddington Bear and JK Rowling’s Platform 9^3/4at King’s Cross in the Harry Potter series.

The CEO of Marsh & Parsons, David Brown, comments on the study: “As a global epicentre of some renown, it’s unsurprising that thousands of authors have chosen London as the backdrop for their novels. Each neighbourhood has its own unique character, so a capital city as vast and diverse as London provides ample ammunition for writers seeking striking settings. Of course, due to this prestige, living in London comes at a cost, and homebuyers looking to follow in the footsteps of their literary heroes will have to pay for the privilege.

“Modern-day London is as far removed from the city portrayed by Charles Dickens in Oliver Twist and Bleak House as to feel like a different metropolis altogether. But as esteemed as London is, there are still affordable opportunities for those who aren’t preoccupied with the most prestigious postcodes. Shoreditch and the surrounding areas have a number of advantages, such as enviable transport links and a stellar cultural and arts scene, and they can also add literary landmark to the long list of plus points. The average property value may be in excess of £700,000 due to some luxury properties at the higher end, but more modest flats are available for a fraction of that price.”

UK Property Market Becoming Increasingly Fragmented, According to New Report

Published On: October 4, 2016 at 10:50 am

Author: Em Morley

Categories: Property News

Tags: London,prime central london,private rental sector,property market

The UK property market is becoming increasingly fragmented, as it is affected by the many headwinds it currently faces, according to a new report from London Central Portfolio (LCP).

The quarterly index shows that this fragmentation has resulted in different growth rates across the core property sectors, which LCP has defined as prime central London’s (PCL’s) mainstream private rental sector, PCL’s luxury property market, Greater London’s new build sector and the domestic market, outside of PCL.

The report, which analyses the latest Land Registry data, highlights a rollercoaster year to date. Demonstrating the distorting effects of changes in tax legislation, the index found that sales volumes have dropped significantly across all sectors in the second quarter (Q2), following a rush of activity in the previous quarter, when landlords pushed forward with transactions ahead of the 3% Stamp Duty surcharge deadline.

Luxury property

PCL’s luxury property market was hit particularly hard in Q2, resulting in a difficult quarter for the houses sector, where average prices have dropped by 21%. Price growth in PCL’s private rental sector, however, was strong in Q2, as it is less affected by the majority of the new residential property taxes introduced over the past four years, as well as being a traditionally consistent performer.

New build sector

UK Property Market Becoming Increasingly Fragmented, According to New Report

Meanwhile, Greater London’s new build sector experienced a 43% fall in sales compared to last year, as international interest for these units begins to wane.

Domestic market

For the rest of the domestic market, encompassing most of Greater London, England and Wales, Q2 saw large declines in prices and sales volumes. While uncertainty ahead of June’s Brexit vote caused a wait-and-see approach, harsher salary caps on mortgage lending may have also begun to hinder buyers, according to LCP.

Due to the delay in Land Registry reporting, the figures for Q3 are not yet available. However, other data indicates that the rollercoaster is continuing. The devaluation of sterling has encouraged more proactive investors to enter the UK property market, particularly in the new build sector, although they are seeking heavily discounted prices.

Flats and maisonettes

The LCP report also found that the mainstream flats and maisonettes sector, which represented 88% of PCL sales in Q2, has shown positive growth, despite pre-EU referendum pressures and changes to tax rules. In Q2, prices rose by a strong 6.6% on the previous quarter, to stand at an average of £1.32m.

This market predominately comprises one and two-bedroom flats, which form PCL’s private rental sector, where pricing usually follows a more consistent performance than the luxury market. This is due to its position as an entry-price market, making it generally more accessible and primarily a rental sector. The price point in this market is also close enough to the domestic Greater London sector to not get captured by the higher tax rates enforced at the higher end of the market.

Next quarter, LCP believes that the market may see little price movement, as there is a divide between vendors who are seeking higher prices and buyers seeking bargains. As a result, transaction levels may not increase significantly, despite the devaluation of sterling post-Brexit, which has expanded overseas appetite.

Private rental sector

Stock levels in PCL’s private rental sector have risen dramatically over the past three months, as many landlords opt to rent their properties rather than sell them. The number of properties to let has increased by almost three times over Q2, from 8,834 to 24,761. This higher level of competition means that tenants are increasingly attracted to good value, newly refurbished properties, as they continue to seek a complete lifestyle experience in their rental homes.

As a result, weekly rents for small, refurbished flats performed best in Q2, with new lets achieving a 3.6% uplift over asking rents.

One-bed properties continue to put in the strongest performance, with weekly rents in PCL now averaging £460 – 5.2% higher than expected returns. Two-bed properties, however, are becoming more popular again, as they now show particularly good value. Weekly rents for this type of property now average £700 – 1.5% higher than asking rents.

However, due to high levels of rental property supply, rents for re-lets of older properties have remained fairly static over the past quarter. This has been compensated by continued positive renewal rises from tenants in situ, with average rent price growth of 3.1%.

LCP therefore advises landlords to look to retain existing tenants if possible, rather than remarketing their properties in the hope of achieving higher rents. It adds that landlords should also be open to conducting remedial and upgrade works between tenancies to remain competitive at the re-let stage.