Showing posts from September, 2018

What Will Happen to Clapham Property Values if Interest Have Risen?

The current average value of a property in Clapham currently stands at £851,200, so what will the recent increase in the base rates at 0.75% do to the local property market (especially property values)? In many of my articles, I talk about what is happening to property values over the short term (i.e. the last 12 months or the last 5 years), but to answer this question we need to go back over 40 years, to 1975.

The average value of a Clapham property in 1975 was £41,208

However, since 1975, we have experienced in the UK, inflation of 807.5%.

Back in 1975, the average salary was £2,291 and average car was £1,840. A loaf of bread was 16p, milk was 28p a pint and a 2lb bag of sugar was 30p. Inflation has increased prices, so comparing like for like, we need to change these prices into today’s money. In real spending power terms, an average value of a Clapham house in 1975, expressed in terms of today’s prices is £374,011.

That means in real terms, property costs a lot more today, th…

New Home Building in Clapham and Lambeth over the last 10 years

Should you, as a landlord for buy to let or for personal occupation, buy a brand-new home?
Well, let’s start by looking at the numbers …

Over the last 10 years, 3,715 new homes have been built in the Lambeth Borough

That is a lot of bricks and mortar! Roll the clock back twenty years in the Clapham property market, and there were two distinct camps of property buyers - folks who would only contemplate living in period character properties with their original fireplaces and beams, and those people who preferred the low maintenance of a new home. Old period homes were ridiculed as money pits by new-home aficionados, while new-home owners were accused of buying boring boxes, all vanilla, all the same, homogenous and bland.

However, it’s not as black and white as that anymore – or not as I see it in Clapham. New homebuilders are now trying to change their cookie-cutter uniform rows of suburban boxes into developments that are as individual as the families that love in them, thus increas…

The Clapham Bank of Mum and Dad Lent £7.82m Last Year

My analysis has shown that up to the end of the last quarter, Clapham first time buyers purchased 221 Clapham properties. With wages rising at 2.8%, unemployment at a low rate of 4.2% (down from 4.6% from a year earlier and the joint lowest since 1975), national GDP rising at 1.87% and inflation at 2.3%, tied in with indifferent house price growth (compared to a few years ago), this has given first time buyers a chance to get a foot hold on the Clapham property market.

Over the last year, the average purchase price of a Clapham first time buyer property has been £500,300 and the average deposit was £81,049. Furthermore, my calculations show the average Clapham parents contributed £35,459 of that £81,049 figure.

You see “The Bank of Mum and Dad (Clapham Branch)” is for countless Clapham twenty something’s, perceived to be the only way they will ever be able to afford their first home. In fact, Clapham parents put up a substantial £7.82m in the last 12 months to help their nearest a…

£534,838 – The Typical Profit Each Clapham Landlord Could Make in The Next 25 Years

I am of the opinion that buy to let investment in Clapham, in the long-term, will bring substantial returns for landlords, irrespective of latest regulation and tax changes.

Taking a very conservative (with a small ‘c’) view, I believe landlords will see a projected net profit of £908,044 per property over the next 25 years through capital gains and rental. When inflation is taken into account that works out at £534,838 (in today’s money) or around £21,394 per year. The breakdown applies to a basic tax-paying landlord placing a characteristic 25% deposit on a £123,600 apartment.

Capital gains make up a substantial part of a landlord’s returns. Again, being conservative, I have assumed that Clapham house prices over the next quarter century (between 2018 and 2043) will rise at half the rate they did between 1993 and 2018 (the preceding 25 years), therefore the example Clapham property in the previous paragraph would grow in value to £385,762, providing gross capital gains of £262,1…

Additional 2,373 Clapham Rented Homes Required by 2027

I have been doing some research, looking both at National and Regional reports on the demand and supply of property and people together with future projections on the economy, population and family demographics with some interesting results. According to the Office of National Statistics, in the last financial year nationally, private renting grew by 74,000 households, whilst the owner occupied dwelling stock increased by 101,000 and social (aka council and housing association) stock increased by 12,000 dwellings.

It was the private rental figures that caught my eye. With eight or nine years of recovery since the Credit Crunch, economic recovery and continuing low interest rates have done little to setback the mounting need for rented housing. In fact, with house price inflation pushing upwards much quicker than wage growth, this has meant to make owning one’s home even more out of reach for many Millennials, all at a time when the number of council/social housing has shrunk by …

Will the Clapham Property Market Crash?

And if it does ... who will be the winners and losers?

Those Clapham people wanting property values to drop would be those 30 or 40 something’s, sitting on a sizeable amount of equity and hoping to trade up (because the percentage drop of your current ‘cheaper’ property will be much less than the same percentage drop of the more expensive property – and trading up is all about the difference). If you have children planning to buy their first home or you are a 20 something wanting to buy your first home – you want them to drop. Also, landlords looking to add to their portfolio will want to bag a bargain (or two) and they would love a drop!

Yet, if you have recently bought a Clapham property with a gigantic mortgage, you’ll want Clapham property values to rise. If you are retired and are preparing to downsize, you will also want Clapham property values to rise (because you will have more cash left over after the move). Also, if you, a landlord looking to sell your portfolio or a Cla…

45% Drop in Properties For Sale Today in Clapham Compared to 10 Years Ago

There is good news for Clapham buy to let landlords as ‘top of the range’ well-presented properties are getting really decent rents compared to a year ago however, this rise in rents is thwarting many potential first time buyers from saving for both a deposit and money for a rainy day. On top of this, there is also a shortage of Clapham homes coming on the market thus adding fuel to the slowdown and affecting not just Clapham first time buyers but also those going up the housing ladder.

Whilst it is true that the Government’s initiatives, targeted at improving the supply of homes built and helping first time buyers obtaining necessary funding, are starting to work (albeit slowly), I also believe that to boost more existing home-owners and their properties onto the market, we as a Country, need to see a better focus placed on those looking to downsize (i.e. the mature generation).

If we took away some hurdles to home owners downsizing, such as removing stamp duty for those downsizer…