South London Property Market Update: Asking Prices Drop as Sellers Seize the Initiative

The average asking price of newly marketed properties in South London has fallen by 1.9% this month to £364,895, according to the latest Rightmove figures.

This is the biggest drop in asking prices at this time of year since 2018, outpacing the average drop of 0.9% in August’s traditional summer slowdown.

Rightmove says the much larger than usual price drop this month indicates that some sellers are "seizing the initiative" and heeding their agents’ advice to price competitively for their current local market conditions, in order to attract a buyer against the backdrop of holidays, cost of living pressures, and the highest Bank of England Base Rate since 2008.

What does this mean for buyers and sellers?

For buyers, this is good news. It means that there are more properties on the market at more affordable prices. If you are looking to buy a home in South London, now is a good time to start your search.

For sellers, it is important to price your property competitively. If you price your property too high, it is likely to sit on the market for longer and you may have to make a price reduction.

What are the key factors affecting the South London property market?

The main factors affecting the South London property market are:

• The rising cost of living, which is making it more difficult for people to afford to buy a home.
• The increase in interest rates, which is making mortgage payments more expensive.
• The ongoing uncertainty caused by the war in Ukraine.
• What is the outlook for the South London property market?

It is difficult to say with certainty what the future holds for the South London property market. However, it is likely to remain challenging for buyers and sellers.

If you are considering buying or selling a home in South London, it is important to speak to an experienced property advisor who can help you understand the market conditions and make the best decision for your circumstances.

Here are some tips for buyers and sellers in the South London property market:

Buyers:

• Be prepared to act quickly when you find a property that you like.
• Be prepared to negotiate on price.
• Consider getting a mortgage pre-approval before you start your search.

Sellers:

• Price your property competitively.
• Get your property professionally staged.
• Market your property widely.

If you are interested in knowing more or you are curious as to what your rental property is worth today drop me a line and pick my brains or use my free online valuation tool to get a ballpark figure!

South London Property Market Stagnant as Stock Levels Surge

A new report has found that the south London property market is stagnant, with stock levels surging by 15% since the start of the year.

What? A slow down? But London prices only go UP!

Well here it is: the research, conducted by the House Buyer Bureau, found that there are now over 720,000 homes listed for sale in England, marking a 9% increase on the same time last year.

Rutland is the county with the most oversaturated property market, with a 26% increase in for sale stock levels compared with the start of the year. Herefordshire, Wiltshire, Dorset, and Somerset are also seeing significant increases in stock levels.

On an annual basis, the Isle of Wight has seen the largest increase in for sale stock, up 27%. Shropshire has seen stock levels increase by 25% year on year, with Lincolnshire, Herefordshire, Cornwall, Devon, Staffordshire, Worcestershire, North Yorkshire, and Nottinghamshire also ranking within the top 10. The only city bucking the trend is Bristol, where available for sale stock has fallen by 9% since the start of this year and sits some 21% below the second quarter of 2022.

What does that mean for London?

As an experienced estate agent in south London, I can tell you that this is a clear sign that the market is slowing down. Buyers are becoming more cautious, and sellers are having to lower their asking prices in order to attract offers. Does this translate to south London? Yes it does to some extent, because nationwide sentiment does have an effect on the market locally. London behaves same, same, but different. Pricing is key.

Is It Time to Sell?

If you're thinking of selling your home in south London, now may be a good time to do so. With more homes on the market than ever before, you're more likely to get a good price for your property.

Of course, there are some factors to consider before making a decision. The cost of living is rising, and interest rates are expected to increase in the coming months. This could make it more expensive to borrow money to buy a new home.

Ultimately, the decision of whether or not to sell your home is a personal one. However, if you're considering it, now may be the time to act.

If you're thinking of selling your home in south London, it's important to get professional advice from an estate agent who can help you price your property realistically and market it effectively and above all PRICE IT RIGHT! A new report from Zoopla has found that sellers are accepting bigger discounts on their asking prices in order to achieve a sale.

DISCOUNTS!

The report found that 42% of sellers have accepted discounts of 5% or more, while another 15% have accepted discounts of over 10%. This is the highest level of discounts since 2018.

The report also found that the average discount to asking price has increased to 3.8%. This is up from 3.4% in the previous quarter.

The increase in discounts is being driven by a number of factors, including rising mortgage rates and a slowdown in demand. Mortgage rates have been rising steadily in recent months, making it more expensive for buyers to borrow money. This has reduced the amount of money that buyers have available to spend on a home, and has led to more sellers being forced to lower their asking prices.

The slowdown in demand is also contributing to the increase in discounts. The number of buyers in the market has fallen by 14% in the past year. This is due to a number of factors, including the cost of living crisis and the uncertainty surrounding the UK economy.

The increase in discounts is good news for buyers, but it is bad news for sellers. Sellers who are hoping to get a high price for their home may need to be prepared to wait longer for a buyer, or to accept a lower offer.

However, the report also found that those buyers who are still in the market are committed to moving home. Sales agreed are running 8% above the five-year average, suggesting that there is still demand for homes, even in a slowing market.

Overall, the report suggests that the UK housing market is in a state of flux. Rising mortgage rates and a slowdown in demand are putting downward pressure on prices, but there is still demand for homes from those who are able and willing to buy.

If you are looking for an agent with pro-active marketing and 20 years of industry experience to get you the best result look no further! Drop me a line and let's get the ball rolling. Drop me a follow on instagram also to see the latest videos. Have you used my online valuation tool yet? Give it a go!

How Would a Hard Brexit Affect Clapham House Prices?

I have been asked a number of times recently what a hard Brexit would mean to the Clapham property market. To be frank, I have been holding off giving my thoughts, as I did not want to add fuel to the stories being banded around in the national press. However, it’s obviously a topic that you as Clapham buy to let landlords and Clapham homeowners are interested in ... so I am going to try and give you what I consider a fair and unbiased piece on what would happen if a hard Brexit takes place in March 2019.

After the weather and football, the British obsession on the UK property market is without comparison to any other country in the world. I swear The Daily Mail has the state of the country’s property market on its standard weekly rotation of front-page stories! Like I have said before on my blog, there are better economic indexes and statistics to judge the economy (and more importantly) the property market. If you recall, I said the number of transactions was just as important, if not more, as a bellwether of the state of the property market.

Worries that the Brexit referendum would lead to a fast crash in Clapham (and national) property values were unfounded, although the growth of property values in Clapham has reduced since the referendum in the summer of 2016.

Now, it’s true the Clapham property market is seeing less people sell and move and the property values are rising at a slower rate in 2018 compared to the heady days of the first half of this decade (2010 to 2015), but before we all start panicking, let’s ask ourselves, what exactly has happened in the last couple of years since the Brexit vote?

Lambeth and Clapham House Prices have dropped by 1.55% since the EU Referendum...

...and yes, in 2018 we are on track (and again this is projected) to finish on 3,879 property transactions (i.e. the number of people selling their home) ... which is less than 2017 ... and not too far below the long term 12 year average of 4,071 transactions in the local council area.

So, it appears the EU vote hasn’t caused many major issues so far, however, if there was a large economic jolt, that could be a different game, yet how likely is that?

The property market is mostly influenced by interest rates and salaries.

A hard Brexit would subdue wage growth to some degree, yet the level of the change will depend on the undetermined type of Brexit deal (or no deal). If trade barriers are imposed on a hard Brexit, imports will become more expensive, inflation will rise and growth will fall, although at least we are not in the Euro, meaning this could be tempered by the exchange rate of the Pound against the Euro. In plain language, a hard Brexit will be worse for house prices than a deal.

So why did the Governor of the Bank of England suggest a disorderly hard Brexit would affect house prices by up to 35%?

I mean it was only nine years ago we went through the global financial crisis with the credit crunch. Nationally, in most locations including Clapham, property values dropped in value by 16% to 19% over an 18-month period. Look at the graph and if we had a similar percentage drop, it would only take us back to the property value levels we were achieving in 2015.

And let’s not forget that the Bank of England introduced some measures to ensure we didn’t have another bubble in any future property market. One of the biggest factors of the 2009 property crash was the level of irresponsible lending by the banks. The Bank of England Mortgage Market Review of 2014 forced Banks to lend on how much borrowers had left after regular expenditure, rather than on their income. Income multipliers that were 8 or 9 times income pre-credit crunch were significantly curtailed (meaning a Bank could only offer a small number of residential mortgages above 4.5 times income), and that Banks had to assess whether the borrower could afford the mortgage if interest rates at the time of lending rose by three percentage points over the first five years of the loan ... meaning all the major possible stumbling blocks have been mostly weeded out of the system.

So, what's next?

A lot of Clapham homeowners might wait until 2019 to move, meaning less choice for buyers, especially in the desirable areas of Clapham. For Clapham landlords, Clapham tenants are also likely to hang off moving until next year, although I suspect (as we had this on the run up to the 2015 General Election when it was thought Labour might get into Government), during the lull, there could be some Clapham buy to let bargains to be had from people having to move (Brexit or No Brexit) or the usual panic selling at times of uncertainty.

Brexit, No Brexit, Hard Brexit … in the whole scheme of things, it will be another footnote to history in a decade. We have survived the Oil Crisis, 20%+ Hyperinflation in the 1970’s, Mass Unemployment in the 1980s, Interest Rates of 15% in 1990’s, the Global Financial Crash in 2009 ... whatever happens, happens. People still need houses and a roof over their head. If property values drop, it is only a paper drop in value ... because you lose when you actually sell. Long term, we aren’t building enough homes, and so, as I always say, property is a long game no matter what happens - the property market will always come good.

Growth in UK property values as well as in Clapham seems fated to slow over the next five to ten years, whatever sort of Brexit takes place.

Do let me know if you are looking to invest and you could use a hand. if you are a ready and able investor sign up to my list that will bring packaged deals to your inbox! If you are looking for no-obligation advice then drop me a line and let's start the conversation.

Clapham House Prices vs Clapham Rents since 2006

The Clapham housing market is a fascinating beast and has been particularly interesting since the Credit Crunch of 2008/9 with the subsequent property market crash. There is currently some talk of a ‘property bubble’ nationally as Brexit seems to be the ‘go-to’ excuse for every issue in the Country. Upon saying that, looking at both what we do as an agent, and chatting with my fellow property professionals in Clapham, the market has certainly changed for both buyers and sellers alike (be they Clapham buy to let landlords, Clapham first time buyers or Clapham owner occupiers looking to make the move up the Clapham property ladder).

Clapham house values are 5.7% lower than a year ago, and the rents Clapham tenants have to pay are 0.3% lower than a year ago

When we compare little old Clapham to the national picture, national property values have risen by 0.4% compared to last month and risen by 3.0% compared to a year ago, and this will surprise you even more, as nationally, property values are 19.8% higher than January 2015 (compared to 11.4% higher in the EU in the same time frame).

However, if we look further back...

Since 2006, Clapham house values are 111.7% higher, yet the rents Clapham tenants have had to pay for their Clapham rental property are 32.6% higher

...which sounds a lot, yet UK inflation in those 12 years has been 42%, meaning Clapham tenants are 9.4% better off in ‘real spending power terms’.

Looking at the graph, the rental changes have been much gentler than the roller coaster ride of property values. I particularly want to bring to your attention the dip in Clapham house values (in red) in the years of 2008 and 2009 ... yet as Clapham property values started to rise after the summer of 2009, see how Clapham rents dipped 6/12 months later (the yellow bars)…. Fascinating!

So, we have a win for tenants and a win for the homeowners, as they are also happy due to the increase in the value of their Clapham property.

However, maybe an even more interesting point is for the long-term Clapham buy to let landlords. The performance of Clapham rental income vs Clapham house values has seen the resultant yields drop over time (if house prices rise quicker than rents – yields drop).

Whilst, it’s true Clapham landlords have benefited from decent capital growth over the last decade –with the new tax rules for landlords – now more than ever, it’s so important to maximise one’s yields to ensure the long term health of your Clapham buy to let portfolio. More and more I am sitting down with both Clapham landlords of mine and landlords of other agents who might not be trained in these skills - to carry out an MOT style check on their Clapham portfolio, to ensure your investment will meet your future needs of capital growth and income. If you don’t want to miss out on such a MOT check up, drop me a line – what have you got to lose? 30 minutes of time against peace of mind - the choice is yours.

Do let me know if you are looking to invest and you could use a hand. if you are a ready and able investor sign up to my list that will bring packaged deals to your inbox! If you are looking for no-obligation advice then drop me a line and let's start the conversation.

Great(er) Expectations: Why Clapham Home Sellers are Having to Reduce Their Asking Prices by an Average of £54,500 Each

As we leave the memorably hot summer behind us, some interesting statistics have come to light on the Clapham Property Market which will be thought provoking for both homeowners and buy to let landlords alike.

Over the last 12 months 756 households have changed hands in Clapham, interesting when compared with the 10-year average of 1,159 households per year.

Yet, for the purpose of this week’s article, I want to discuss the pricing of the current crop of Clapham’s property sellers and the prices they are asking for their homes and the prices they are achieving (or not as at the case may be). It is so important for all property owners to know the real story, so they can judge for themselves where they stand in the current Clapham housing market, thus enabling them to make suitable and informed decisions… and that is why, in my blog about the Clapham Property Market, I pride myself in telling the people of Clapham the real answers, not just the ones they want to hear.

The national average of homes selling at or above the asking price currently stands at around 10%, so around 90% go below the asking price – but by how much? Well according to Rightmove, in the Clapham area, the average difference between the ‘FINAL asking price’ to the price agreed is 4.4% … yet note I highlighted the word FINAL in the last statement.

You see some Estate Agents will deliberately over inflate the suggested initial asking price to the house seller, because it gives them a greater chance to secure the property on that agent’s books, as opposed to a competitor. This practice is called overvaluing. Now of course, each homeowner wants to get the most for their property, it is quite often their biggest asset – yet some agents know this and prey on those house sellers. You might ask, what is the issue with that?

Well, you only get one chance of hitting the market as a new property. Everyone has access to the internet, Rightmove and Zoopla etc, and your potential buyers will know the market like the back of their hand. If you have a 3 bed semi that is on the market for a 3 bed detached house price.. those buyers will ignore you. Your Clapham property sticks on the market, potential buyers will keep seeing your Clapham property on Rightmove each week, then start to think there is something wrong with it, dismiss it even further, until you, as the house seller have to reduce the asking price so much (to make it appear inexpensive) to get it away. According to our own research, the average house buyer only views between 4 and 5 houses before buying – so don’t assume viewers will come round your optimistically priced (i.e. overvalued) property, thinking they will knock you down – no quite the opposite!

So how widespread is overvaluing in Clapham? The results might surprise you …

43.9% of properties in Clapham, currently on the market, have reduced their asking price by an average reduction of 6.5% (which equates to £54,500 each)

So, all I ask is this.. be realistic and you will sell at a decent price to a decent buyer. First time – every time – enabling you to move on to the next chapter of your life.

Do let me know if you are looking to invest and you could use a hand. if you are a ready and able investor sign up to my list that will bring packaged deals to your inbox! If you are looking for no-obligation advice then drop me a line and let's start the conversation.

How Affordable is Property for Clapham’s Average Working Families?

The simple fact is we are not building enough properties. If the supply of new properties is limited and demand continues to soar with heightened divorce rates, i.e. one household becoming two, people living longer and continued immigration, this means the values of those existing properties continues to remain high and out of reach for a lot of people, especially the blue collar working families of Clapham.

Looking at some recent statistics released by the Government, the ratio of the lower quartile house prices to lower quartile gross annual salaries in Lambeth London Borough Council has hit 15.25 to 1.

What does that mean exactly and why does it matter to Clapham landlords and homeowners?

If we ordered every property in the Lambeth London Borough Council area by the value of those properties, the average value of the lower quartile properties (i.e. lowest 25%) would be £400,000. If we then did the same, and ordered everyone’s salary in the same council area, the average of the lowest quartile (lowest 25%), the average salary of the lowest 25% is £26,235 pa, thus dividing one with the other, we get the ratio of 15.25 to 1.

Assuming there is one wage earner in the house, the chances of a Clapham working family being able to afford to buy their own home, when it’s over fifteen times their annual salary, is very slim indeed. The existing affordability crisis of people wanting to buy their own home is the unavoidable outcome of the decade on decade failure to build enough homes to keep up with demand. Nevertheless, improving affordability is not a case of just constructing more homes. Lambeth London Borough Council needs to ensure more properties are not only built, but built in the right locations and of the right type and at the right price to ensure the needs of these lower income working families are met, because at the moment, they presently have few options apart from the private rental sector.

Looking at the historic nature of the ratio, it can clearly be seen in the graph below that this has been an issue since the early to mid 2000’s.

However, if one looks at the historic data, those on the bottom rung of the ladder (those in the lower quartile of wage earners) used to be housed by the local authority instead of buying. However, the vast majority of council houses were sold off in the 1980’s, meaning there are much fewer council houses today to house this generation.

Many of the lower quartile working class families were given a lifeline to buy their own homes in middle 2000’s, with 100% mortgages, but the with the credit crunch in 2009, that rug (of 100% mortgages) was rudely pulled from under their feet. You see it is cheaper to buy than rent ... it’s the finding of the 5% deposit that is the challenging issue for these Clapham working class families. So unless the Government allow 100% mortgages back, the fact is, demand for rental properties will outstrip supply.

In the long term, to alleviate that, I would suggest the Clapham community hold their local politicians at Lambeth London Borough Council to account for the actions they could take to ensure the affordability of housing and the extent to which they work with private developers and housing associations and aggressively use the planning tools at their disposal to safeguard the local community getting the new households we need. Lambeth London Borough Council could make certain parcels of residential building land for private rented development only, eliminating the opportunity of the land being bought to develop large executive homes, which do not solve the current problem.

Yet in the short term, all this means is demand for rental properties will continue to grow, keeping Clapham house prices high and Clapham rents high.

Do let me know if you are looking to invest and you could use a hand. if you are a ready and able investor sign up to my list that will bring packaged deals to your inbox! If you are looking for no-obligation advice then drop me a line and let's start the conversation.

Clapham Property Market – Asking Prices Down 5% in the Last 12 Months

The average asking price of property in Clapham dropped by 5% or £43,919 compared to a year ago, taking the current average asking price to £830,517 compared with £874,436 this time last year.

The overall drop in asking prices is being put down to sellers being more realistic with their pricing and looking to benefit from the impending mortgage interest rate rises later in 2018. This is great news for first, second and third time buyers in Clapham starting their property hunting in the usually active spring market this year facing the opportunity of paying less for the property of their dreams. Even better news is that whilst first time buyers also have to pay less for their property, they also have the bonus of the Chancellor stopping Stamp Duty being paid by first time buyers!

Looking at the different sectors of the Clapham property market, splitting it down into property types, one can see what is happening to each sector of the market with regard to their average asking prices now compared to a year ago. Firstly, looking at the Pound note amounts…

Interestingly, when one looks at the percentages, the most movement in average asking price pressure is in the detached property type sector.

Now, I must stress this overall drop in the asking prices of Clapham property doesn’t necessarily mean the value of Clapham property is going down by the same amount.

Only time will tell if the current levels of Clapham asking prices is a correction of optimistic house sellers after a couple of months of enthusiastic asking price rises in the lead up to Christmas, or is it an initial sign that property values are slipping. To judge what is really happening to the Clapham property market, I believe these asking prices must be viewed in conjunction with both the values achieved and the length of time it takes to sell the property.

Also, these figures are averages, so it might also mean less expensive types of Clapham semi’s or Clapham apartments, are on the market now, this dragging the average down, compared to a year ago.

One thought I would like to share with the Clapham homeowners and landlords wanting to sell their property, is the fact they need to be aware of the competition of other people selling their homes. One factor that could be contributing to a subdued demand for local property is the progressively strained buyer mortgage affordability (i.e. banks telling people they can only afford so much on a mortgage), meaning more and more buyers are hitting their maximum on the amount they are able to borrow on a mortgage sooner than they thought.

So, what does this all mean, especially for buy to let landlords in Clapham? During these months of flux, there could be some property bargains to be had. Lower asking prices mean you are buying in better yields and potential capital growth at the same time. Many Clapham landlords pick the phone up or email me with Rightmove links, asking my opinion on the BTL potential of property. I don’t charge for that service, so if you don’t want to miss out on such opinion, follow what they do and make contact ... I don’t bite!

I hope you enjoyed reading. If you are keen to take things further, be it to start from scratch, or do something a bit more interesting with your current portfolio... Start the conversation on email. I'd love to meet you in person of course at this month's Clapham Property Meet, so do come along. Click here for tickets and more info.

Video tips series - Video 19/30 - Little known research tools to aid your property investing

Ever wondered about how property investors do their research? Due diligence? Working out raw data to see if investments stack up?

In this video I give away some of the tools I use:

https://www.youtube.com/watch?v=nTGk8JeBoIE&t=10s


I hope you enjoyed my video. Do let me know if you are looking to invest and you could use a hand. if you are a ready and able investor why not sign up to my list that will bring packaged deals to your inbox? Sign up here. I'd love to meet you in person at this month's Clapham Property Mee, so do come along. Click here for tickets and more info.

Clapham Property Market – The 22.7% ‘New Build Premium’

According to the National House Building Council (NHBC), more than 17,800 new homes were registered to be built in London last year, an increase of 1.5% on 2016 levels of 26,150 dwellings. Great news when you consider it is one of the highest number of new builds in the region since the pre-recession levels of the Credit Crunch and the uncertainty of Brexit and the General Election.

So, when a landlord recently asked me why the brand-new property she was considering buying was a lot more expensive compared to a second-hand/existing property of similar type, accommodation, location and structure I thought this would make a fascinating topic to do some homework on … homework I want to share with the homeowners and landlords of Clapham.

You might believe that the difference between purchasing a new build home against purchasing a second-hand/existing home is just individual preference. Some buyers/tenants like the ostentatious trendy modern feel of a new home, whilst others like a home that has stood the test of time.

So, what is the right answer? Well, I am going to be looking at some statistics that shows there is a real difference in the Clapham and Lambeth London Borough Council area’s property market when in to comes to new vs existing homes and the price paid. Looking at the average price paid for existing (second-hand) versus a brand new home since 1996, one can see from the graph it makes interesting reading.

On this second graph, one can see the percentage difference in average price paid between new and existing…

Yet possibly nothing is ever that easy, as there are issues with these statistics.

Whilst, the overall average for the whole Lambeth London Borough Council area for the ‘new build premium’ (new build premium being the additional price a buyer pays for buying a new property compared to a second-hand one) over the last 21 years has been 22.7%. These statistics actually show that it is problematic to compare like with like because it is impossible to completely separate all the different factors of type, accommodation, location and structure etc.

One would have to have a mirror image second-hand Clapham home and a duplicate new build right next door to each other, then calculate out which Clapham house buyers or Clapham buy to let landlords would pay more for? Perhaps if everything was the same (all things being equal), there might not be any difference in what buyers would be prepared to pay… but then again, it’s like new cars versus cars that have a few hundred miles on the clock ... there is always a difference on the forecourt …. because things are never wholly equal.

What I do know is that my statistics of the Clapham property market show that new build Clapham apartments are worth more to people than their second-hand equivalents, whilst the difference is negligible between new build Clapham detached houses and second-hand Clapham detached houses.

However, I believe the really important lesson in all these statistics is the fact that ‘new build premium’ for new-build versus buying a second-hand property increases in a buoyant market and reduces in a tougher market. So, if you want to buy new and the only consideration is money … try buying in a tougher challenging property market.

I hope you enjoyed reading. If you are keen to take things further, be it to start from scratch, or do something a bit more interesting with your current portfolio... Start the conversation on email. I'd love to meet you in person of course at this month's Clapham Property Meet, so do come along. Click here for tickets and more info.

With Clapham Annual Property Values 1.2% Higher, This is My 2018 Forecast

Looking at the newspapers between Christmas and New Year, it seemed that this year’s sport in the column inches was to predict the future of the British housing market. So to go along with that these are my thoughts on the Clapham property market.

With the average 5-year fixed rate mortgage at 1.98% (down from 3.47% in 2014) and 2-year fixed rate at 1.47% (down from 2.37% in 2014), mortgage interest rates offered by lenders are at an all-time low (even with the slight increase on the Bank of England base rate a few months ago). Added to this, there has been a low unemployment rate of 5% in Clapham, which has contributed to maintain a decent level demand for property in Clapham in 2017 (interestingly – an impressive 741 Clapham properties were sold in last 12 months), whilst finally, the number of properties for sale in the town has remained limited, thus providing support for Clapham house prices, meaning …

Clapham Property Values are 1.2% lower than a year ago

However, moving into 2018, there will be greater pressures on people’s incomes as inflation starts to eat into real wage packet growth, which will wield a snowballing strain on consumer confidence. Interestingly though, information from the website Rightmove suggested over a third of property it had on its books in October and November had their asking prices reduced, the highest percentage of asking price reductions in the same time frame, over five years. Still, a lot of that could have been house-sellers being overly optimistic with their initial pricing.

In terms of what will happen to Clapham property values in the next 12 months, a lot will be contingent on the type of Brexit we have and the impact on the whole of the UK economy. A lot of people will talk about the Central London property market in the coming year, and if the banking and finance sectors are negatively affected with a poor Brexit deal, then the London market is likely to see more of an impact.

Nevertheless, the bottom line is Clapham homeowners and Clapham landlords should be aware of what happens in the rollercoaster housing market of Central London, but not panic if prices do drop suddenly in 2018. Over the last 8 years, the Central London house prices have grown by 89.6%, whilst in Clapham, they have risen by similar figure of 82.7%. So if we do see a correction in the Capital, of say 5% to 10%, it will only take us back to Clapham house prices that were being achieved only 12 to 18 months ago ... and nobody was complaining or worrying then!

Hindsight is always better than foresight and predicting anything economic is all well and good when you know what is around the corner. At least we have the Brexit divorce settlement sorted and, as the UK economy and the UK housing market are intertwined, it all depends on how we deal as a Country with the Brexit issue. However, we have been through the global financial crisis reasonably intact ... I am sure we can get through this together as well?

Oh, and house prices in Clapham over the next 12 months? I believe they will end up between 0.5% lower and 1% higher, although it will probably be a bumpy ride to get to those sorts of figures.

If you would like to read more articles on my thoughts on the Clapham property Market – please visit the Clapham Property Blog

I hope you enjoyed reading. If you are keen to take things further, be it to start from scratch, or do something a bit more interesting with your current portfolio... Start the conversation on email. I'd love to meet you in person of course at this month's Clapham Property Meet, so do come along. Click here for tickets and more info.

The Clapham House Price Index: 200.26

I had the most interesting conversation the other day with a local Clapham accountant, who asked me about my articles on the Clapham property market. It was quite humbling to be given praise by such a professional, when he commented enthusiastically on the articles I write. He was particularly interested with the graphs, facts and figures contained within them – so much so he recommended his clients read them, as most of them were either Clapham homeowners, Clapham landlords and a lot of the time - both. However, one question that kept me on my toes was, “With so many House-Price-Indices, how do you know which one to use and how can you calculate what is exactly happening in Clapham?”

To start with, there are indeed a great number of these Indices, including the Land Registry, Office of National Stats, Halifax, Nationwide and LSL to name but a few. The issue occurs when these different house price indices give diverse pictures of the state of the UK housing market. Whilst some indices measure the average value of every property in the UK (sold or unsold), others measure the average ‘price-paid’ of houses that happen to be sold over a fixed time scale… confusing isn’t it!

A lot of the variance between house price indices occurs because of the distinctive ways in which the numerous indices endeavour to beat these issues. You see, the biggest problem in creating a house-price-index when comparing and contrasting with most other indexes (e.g. inflation where the price a ubiquitous tin of Beans can easily be measured over the months and years), is every home is unique and as Clapham people are only moving every 11 years, it appears the only thing that can be measured is the price of property sold in a given month.

By their very nature, all of the indices are only able to paint a picture of the whole of the UK or, at best, the regional housing market. As I have said many times in my articles on the Clapham property market, it is important to look to the medium term when considering house price inflation/deflation. Looking at the month-to-month jumps, many indices look like one of those jumpy lie-detector needles you see in the cold war movies!

I can guarantee you in the coming few months, on a month-by-month basis, one or more of the indices will say property prices will have dropped. Let me tell you, no property market indices are representative of the housing market in the short term. Many indices have shown a drop around the Christmas and New Year months, even the boom years of 2001 to 2007 and 2013 to 2015.

So, back to the question, how do we work out what is happening in the Clapham Property Market and can there be a Clapham House Price Index?

To calculate what I consider is a fair and proper House Price Index for Clapham, I initially needed to decide on a starting place for the index. I have chosen 2008 as far enough away, but still gives us a medium/long term view. Next, I split all the house sales into their types (Detached/Semi/House /Apartment) to give us an indication of what is actually selling by postcode district. So, for example, below is a table for the SW4 postcode district (the sample shows 2008, 2016 and 2017).

	2008	2016	Proj 2017
Detached	1.0%	0.7%	1.0%
Semi Det	4.8%	3.9%	4.3%
Terraced	19.3%	19.4%	19.1%
Apartment	74.9%	76.1%	75.7%

Then I look at the actual numbers of properties sold in the SW4 postcode district. Below is the graph with the numbers for the years already mentioned.

Next, I have looked at the prices paid for those types for every year since 2008, again in this example using the sample years of 2008, 2016 and 2017 for the SW4 postcode.

Finally, I amalgamated the same data points for the other postcode districts covered by Clapham and the surrounding villages, weighted it accordingly, to produce the Clapham House Price Index ... which after all that work, currently stands at for Q4 2017 at 200.26 (Q4 2008 = 100).

I hope you found that of interest and over the coming months and seasons, I shall refer back to Clapham House Price Index in my Clapham Property Blog to give you a flavour of what is really happening in the Clapham Property Market

I hope you enjoyed reading. If you are keen to take things further, be it to start from scratch, or do something a bit more interesting with your current portfolio... Start the conversation on email. I'd love to meet you in person of course at this month's Clapham Property Meet, so do come along. Click here for tickets and more info.

More contradicting headlines in the news today. What's really going on in Clapham?

Not a day goes by that I don't have my finger firmly on the pulse. Be it Clapham, Brixton or beyond I do like to get a feel of what is going on in South London. As do you, I'm sure.

Today, however, I was confronted with such contradicting headlines I couldn't help but tell you about it.

A selection:
House price growth to slump 1% post-Brexit
Prime London prices cool in Q2
Limited company applications surge in June
43 million Brits 'would go over budget' for the right home

The first claim about house prices "slumping" (if you can call 1% a slump) was made by Fionnuala Earley, Countrywide’s Chief Economist. Forgive me for not immediately agreeing. Countrywide have not exactly been the best bunch of business people or estate agents for that matter, so much so that they are now investing heavily in online property sales. Anyway, rest assured, they do conclude with something sensible such as "Countrywide says they will mean prices returning to levels similar to Q1 2016". Scaremongering over.

The second article again has a misleading title. You get the jist of the article by the title you would have thought, but I quote "The rate of quarterly house price growth in Prime London cooled in the second quarter of the year, with a 0.3% decrease from the opening three months of the year". Yes, you read that right, the RATE OF HOUSE PRICE GROWTH. So there is still growth. Excellent news.

On the brighter side you will see that limited company applications are up in the mortgage sector. A very interesting development - it is clear that astute landlords have taken advice to proceed down such a route. Thanks to a growing number of lending products now available to limited companies (this has grown exponentially over the course of this year) more and more landlords are incorporating and taking advantage of this tax efficient way of holding a portfolio. A clear sign that a) opportunities are there and b) investors are not holding back.

The last headline pertains somewhat to investors using a "buy-to-sell" strategy. Excellent news really. In a nutshell 75% of people would stretch the budget to get the ideal property that suits their needs. With this in mind I re-emphasise that knowing your target audience can pay dividends. A bidding war worth of dividends, mind you! A recent development of mine saw a bidding war - perhaps due to the modern bathroom with underfloor heating, perhaps because of the wine cooler in the kitchen. Maybe both. I know for a fact though that first time buyers like aspirational property, so sell that lifestyle; the key to a successful development.

In summary, read closely. Headlines conflict, but the overall message is still clear: there is a market for your product (property). If you are selling, ensure you know your audience. Same goes of course for your letting portfolio, but key is to structure wisely to minimise your tax bill. With recent changes you will see some of your tax breaks go, so make sure you adapt, or you will lose money to the Chancellor of the Exchequer.

To finish off, a lovely quote from the first article: "Annually, Prime London prices saw a 1.3% increase, rising to 2.7% in Outer Prime London. This has been driven by particularly strong growth in certain south London areas, with Clapham (9.2%) and Balham (6.5%) – forever popular with aspirant, young professionals – leading the charge. North Kensington (5.1%) also enjoyed solid price growth on a year-on-year basis." Lovely news of course, so let's keep investing locally!

Remember - if you are after investment advice, whether you are looking to grow your existing portfolio or start afresh then do get in touch by emailing me on jeroen@claphampropertyblog.com or come and meet me at the Clapham Property Meet Wednesday 28th September. There are still a few tickets remaining to the event, so do RSVP promptly here. Also, if you are looking for hands-off investing and you wish to invest upwards of £50,000 then do get in touch as I have a number of transactions that are ready for funding within the next 2-12 weeks. I help investors like you make better returns on their investment. I have done so for nearly 15 years, with proven results. If you are interested in taking the next step on your investment journey then reach out and I will expertly guide you through the process. I am actively looking for clients to invest with and for to expand the current successful portfolio.