Ex-Council property in Clapham & Brixton? Buy now, the stigma is gone!

I was speaking to a buyer the other day and they were delighted with their new purchase. A two bedroom ex-local authority flat on the Cowley Estate in Brixton. They were delighted, despite it needing masses of work in the form of renovation. Having previously been let to a housing association you can imagine the state of disrepair it was in. Thankfully the bathroom was fully tiled, so that was the saving grace, just cleaning to be done there.

But as all good first time buys on a budget go, with a lot of blood, sweat, tears and elbow grease they will have that flat in pristine condition in no time. Or a lot of time, but it doesn't matter. Ultimately they have bought well. Having sold a few on the Cowley estate in my time I couldn't believe the way prices have changed over the years. For the better of course.

The estate itself has undergone a radical change over the years. Security gates with fob entry to keep the rogue parkers and their cars out, a refurbished playground for the children, and a whole host of improvements to windows and communal areas.

So who is buying these flats? Well it's not just buy to let investors that want to rent to LHA tenants. The buyers are young professionals who are buying to live in. And whether the new occupants are tenants or buyers, the number of people returning home from work in their suits and skirts (clearly just stepped out of the office in the City) was amazing. A real change.

These new buyers were telling me all of their friends were buying ex-local authority apartments. It's not just the Cowley estate that has massively improved over time, but others locally as well. Lambeth has been on a mission to improve their estates over the past few years and it certainly does show. The influx of professional buy to let landlords, together with competing first time buyers after value for money property is changing the demographic of these estates altogether.

I remember one of my first encounters in a block on Union road. Three girls came to see it. I arrived early, there were kids screaming, youths being thuggish and laughing around a burning car, boys on mopeds pulling wheelies. Nice. But gladly that doesn't happen any more, and prices have nearly doubled since then, in terms of rentals and sales.

So moral of the story? Ex-local authority flats are the new hot thing. If you're buying to live in or invest, the influx of suits that are a bit savvy is hard to avoid. Coming to an estate near you.

If you'd like some pointers with your purchase, investment or otherwise, feel free to pick up the phone and give me a call. Happy to talk. Or if it's easier drop me a line on jeroen@claphampropertyblog.com.

So, tax changes ahead – what does it mean for you and your property in Clapham and surrounds?

Not much, really! Well, that’s a slight understatement. The impact of the taxation changes facing Buy to Let landlords will vary of course. To see exactly how they will impact you let’s look at what has changed:

• Rent a room relief up to £7,500 per annum from £4,250
• Principal home exempt from IHT (up to £1million)
• Interest payments on loans capped at basic rate of tax (currently 20%)

For most of my readers they will be looking at renting whole properties, not necessarily a room in their own home. So the Rent a Room relief, although an admirable initiative to get spare rooms filled in homes (and thus taking the strain off social housing and perhaps even the PRS) is not going to affect many serious BTLers.

The same goes for IHT exemptions. These don’t go for BTL properties, so tax still due upon sale of 28%.

Interest payments. Now ears must perk up. Although it is reported that 2/3 of BTL property purchased is not subject to finance a you will have read my articles on gearing and you will have geared up to 80% to make the most of investing with your bank’s money! So… instead of subtracting all of the interest you pay from your taxable profits you can now only deduct 20%. What does this mean?

Mr Investor has a BTL property on top of his £40k per annum job and his tax return looks like this:

£15600            Rental income

LESS

£1560              Wear and tear

£1800              Letting fees and such

£10,000           Mortgage interest

Leaves

£2240 profit or taxable income. Which at the rate of 40% tax means a tax bill of £896 leaving NET income at £1344.

Under the new rules (and bear in mind this will be phased in FROM 2017 to 2020, so let’s not get excited just yet…):

£15,600           Rental income

LESS

£1,560             Wear and tear

£1,800             Letting fees and such

Leaves

£12,240 profit or taxable income excluding mortgage interest

£2,000 We apply the interest rate deduction of 20% of 10,000 (mortgage interest)

Leaving £10,240 taxable, which at the rate of 40% tax means a tax bill of £4096 leaving NET loss of £1,856.

A loss?? Yes indeed a loss. In this example the property is indeed running at a loss. However this is just one example. It may appreciate particularly well in value, so the monthly loss of £150 may be worth it if you can refinance the property and release equity to buy another property, preferably one with a better rental yield in order to help the negative cash flow on this one.

So to summarise:

• These measures will be brought in over the years 2017-2020. Plenty of time to prepare, gear your portfolio correctly and adjust your strategy for better yields
• Bear in mind lots of landlords will ask higher rents to compensate. The net effect is likely to be so dramatic as my example if rents jump up sharply. And they will most certainly be higher in 2 years’ time than they are now.
• Buy better yielding properties to help aid cash flow (you should be doing this already, not just buying for capital gain). Spread the risk. You should have a portfolio of mixed capital appreciation and rental yield properties for safe investing

If you have any questions do get in touch. I’m always on hand to offer advice or opinion. Email me on jeroen@claphampropertyblog.com or call me on 020 3637 4474.

Property values up in Clapham up by 18% and Brixton by 20%

A landlord came in to seem me the other day and he was keen to hear more on my take on the market. He had been investing in established areas such as Kensington and Chelsea for years and had made a lot of money in doing so. He was telling me that over the years he had made great investments in SW3 but was curious to hear more about the property market South of the River Thames, particularly Clapham and Brixton.

I was all too glad to oblige. I've seen a lot over the years. Clapham and Brixton have changed. For better, in the property sense. What I've seen over time is that Clapham has been Brixton’s affluent neighbour. This is still true to a certain extent; property prices are indeed higher there. Indeed places like Clapham Old Town and Between The Commons (arguably Battersea but we’ll agree it’s a desirable area bordering Clapham Common so let’s call it Clapham today) have always been desirable and you will see a lot of families living here. Less flats, more houses. And these prices, just like properties in Chelsea have gone up a good amount over the years.

What’s the problem then? Buy the most expensive house you can afford in the nicest possible area and you will have the best investment? Yes and no. Maybe a great investment from a capital growth perspective. Not the best investment from a yield perspective. You see here’s the thing. The desirability of those houses is very much restricted to a certain target audience – families. And as you will know from various research people are waiting longer and longer to start families. Single occupation units are on the rise. Why do you think all these room let people are doing so well? So let’s look at Brixton for instance. Hip, young trendy, the Dalston of 2014 it was called. Or Hoxton or Deptford, I can’t keep up with this skinny drainpipe jeans bearded lot… Anyway point I’m making is that properties are CHEAPER to buy in Brixton than they are in Chelsea. And more desirable for the hip and trendy young folk. Which is good, because they want to rent. They don’t want to be tied down with a wife, kids and a labracockadoodledoo (or whatever). This means that rental demand is better – it always is in cheaper segments of the market. Cheaper cars sell in greater volume than Bentleys and Rollers…Families don't want to rent as much, so your expensive house won't yield as well as a smaller house or flat in Brixton for example. With yield I mean the % of rent vs purchase price.

Now Mr. Landlord reminded me that his property’s prices went up by 17.8% in the last two years. I reminded him that SW4 property prices went up by 18.4% over that period and SW2 property prices went up by 20%. And with better rental yields than in Chelsea he had seen the light. He quickly asked me to source some investments for him!

If you’re ever passing by Clapham Park Road or you fancy a chin wag about the weather or property (I know a bit more about the latter truth be told) come in and see me! Or drop me a line on jeroen@xandermatthew.com or hop on the phone 020 3397 2099. Happy to talk investments and property all day long.

A landlord asked me about auctions - and a good thing she did!

Well I tell you what, last week's "auction specials" on the blog have certainly stirred up some interest. Lots of landlords came back to me with potential ideas with what they were going to do after having had a look at the properties in the flesh. All very exciting!

Some of you who are eagerly looking for the next deal but didn't know quite how to go about buying at auction asked me for hints, tips and advice. I thought I'd share these as I know there are plenty of readers out there who WANT to take the next step, but don't realise quite how to go about getting an auction property.

I'll go through a couple of things and perhaps you'll decide it's too risky for you after all. Nothing wrong with buying through estate agents, there can be a lot of competition in the room on the day and that may drive the price up over and above your budget. Don't be tempted to win an auction for the sake of winning (we've all done that on eBay!) as it could cost you dearly.

1. Decide on a property and strategy - will you hold it and rent it out for long term gain? Or will you be looking to add value and resell straight away? If you are just starting out the former is probably a safer bet as it may be financially restrictive to be able to spend ample on a property and then have the funds for refurbishment too.
   
   
2. If you are holding and renting are there tenants in situ already? Are they professionals or Housing Benefit tenants (if the latter your income will be capped by the Local Housing Authority - they only pay x for a 1bed and y for a 2bed and so forth, so you'll never get more than that). If there are private tenants in there are they paying market rate? Check with local agents (ahem) as to what you can reasonably expect to get in its current condition and after you do some work. Factor in the costs of the work - is it worth doing straight away to get a higher rent, or could you use that money to perhaps invest in another property?
   
   
3. Are you buying with a mortgage or buying with 100% cash? If you are buying with a mortgage you will be wise to get the property surveyed first and bid with a mortgage offer in hand for the highest amount you will want to pay. This way if you get it for less, great, it can be amended and you'll have the funds ready for completion. But if you go over you will have to find the difference yourself! If you are buying a flat to hold and rent but you want to do work to it this will raise the value. In order to take advantage of that boost in value you will want to buy with cash if possible and then mortgage it later. You can, of course, take a redemption free mortgage but these often attract a lot of fees, thus eating into your returns. Do your sums wisely.
   
   
4. Always have an exit strategy. Holding and renting? What if you can't get the rent you want, are you happy to drop the price? Be sensible. Better get £450pw when you can't get £500pw because the alternative is £0! You can give the market a try next time around when tenants are in there paying your mortgage and you have their 2 months' notice to play with.

There are always potential downsides to buying at auction and particularly pre-bidding. You may want to look at 3 properties, get 3 different lots of surveys and mortgage offers done and see what you end up buying on the day - but this is expensive, if you end up buying the first one then the other two are wasted, but all 3 could go over what you are willing to pay and you can waste thousands in search of a bargain - is it really a bargain then? Higher risk, higher reward of course.

There is of course the old school buy-to-let route. A slower process of course but you are generally in less competition. Pick your flavour - this will be down to your attitude to risk of course.

As always give me a call on 020 3397 2099 for a chat or drop me a line on: jeroen@xandermatthew.com – I'm always on hand to answer any property related questions.

(Is There Trouble With) Houses in Multiple Occupation (HMO), Anyone?

I’ve had a busy week answering lots of questions from landlords and one asked me about multi-lets. He was worried about HMO regulations and the like, something that you may have heard of.

“Should I be worried?”

“Do I need a license?”

“How much does it cost?”

“If I don’t get a license will I get caught?”

Well for starters what is an HMO? With houses in multiple occupation imagery of derelict bedsits come to mind don’t they? Nothing is further from the truth in London. A lovely 5 bedroom Victorian residence can be considered an HMO as can a bedsit squalor.

The following is defined as an HMO by the national HMO network:

• An entire house or flat which is let to 3 or more tenants who form 2 or more households and who share a kitchen, bathroom or toilet.
• A house which has been converted entirely into bedsits or other non-self-contained accommodation and which is let to 3 or more tenants who form two or more households and who share kitchen, bathroom or toilet facilities. 
• A converted house which contains one or more flats which are not wholly self-contained (ie the flat does not contain within it a kitchen, bathroom and toilet) and which is occupied by 3 or more tenants who form two or more households. 
• A building which is converted entirely into self-contained flats if the conversion did not meet the standards of the 1991 Building Regulations and more than one-third of the flats are let on short-term tenancies. 
• In order to be an HMO the property must be used as the tenants’ only or main residence and it should be used solely or mainly to house tenants. Properties let to students and migrant workers will be treated as their only or main residence and the same will apply to properties which are used as domestic refuges.

There’s a few terms thrown in there like “household” which is defined to death also but in layman’s terms – anyone eating or doing washing together or family-related.

Therefore three friends sharing together are considered three households. If a couple are sharing with a third person that would consist of two households. If a family rents a property that is a single household. If that family had an au-pair to look after their children that person would be included in their household.

BUT…

An HMO is not necessarily a LICENSABLE HMO. When asked about HMOs this is generally what people refer to, as quite frankly, if it has no effect on anything else then why bother calling it an HMO??

What properties need a license? Simple: You need an HMO licence if you own or manage an HMO that is:

• three or more storeys AND
• let to five or more people AND
• made up of two or more households.

So if it doesn’t satisfy all 3 above, then you don’t need a license. In essence what one will find is that letting a large property as an HMO brings all sorts of problems. A lot of investors do it this way, but personally I’m not a fan… reasons below:

• Tenants moving in and out all of the time
• You will need to readvertise rooms regularly (tenants might not get on etc)
• Carry out inspections at every changeover
• Deal with deposit return and other admin every time someone moves in and out
• Tend to repairs more regularly as people treat the property less well (short term views)
• HMO regulations insist on modifications such as fire alarms, fire doors (shame to get rid of beautiful period doors for instance)
• Tempted by high returns but left high and dry with voids due to difficult tenants
• Once a property is registered as an HMO it wouldn’t likely be considered to be a family home for potential purchasers (stigma) hence limiting capital growth
• Finance may be more difficult to obtain as the investment is seen as higher risk – a higher deposit would mean tying up more capital than with other investments.

So in answer to my dear landlord above, costs are substantial. These vary per council of course but Lambeth will want up to £250 PER ROOM PER YEAR upon initial application (discounts available for “Accredited landlords”) which go down a little bit upon renewal, but eat into income of course. As well will your costs of sorting out fire alarms and ripping out your lovely period features. However proceed without a license and you will leave yourself open to prosecution. They have clever ways of picking this up, not just limited to checking how many people are on the council tax bill…

My professional opinion would be to limit the number of tenants to 4, perhaps taking a slight hit on the rental achieved in order to get the capital gain, but in all honesty the better yielding properties (and better for capital growth) have thus far been smaller units.

So bigger units? Great for diversification of course as there is usually a steady demand for family homes, and increasingly so as more and more properties are being chopped in to flats. Perhaps a good long termer, but in the short-medium term look at smaller units. Just look at the yield for now and build cash flow. This way with relatively small deposits one can build a portfolio which you can then diversify with acquisition of (larger) period properties. The problem with older stock is that it appreciates, but the yield is generally less good. This means that you will have to pay a higher deposit because the banks will require that the rent is 125% of the interest payment (always calculated at 5%, to allow for rate rises). Let’s compare two purchases:

A Victorian £400k 1bed flat will rent at 1500ish in a good part of SW2 or SW4.

• That’s £18k per annum rent
• Divide by 1.25 means your max interest payment is £14400 per annum
• Divide by 5% and the max loan you can get on this property is £288k, which means a 112k deposit.
• Realistically you will get a rate around 2.5% so will yield you £900gross per month yield

Ex-local 3bed for £300k in Streatham/Brixton Hill will let at the same money (worst case)

• £18k per annum
• Divide by 1.25 means your max interest payment is £14400 per annum
• Divide by 5% and the max loan you can get on this property is £288k, but capped to 80%LTV, so loan of £240k
• The difference between the mortgage and the rent here is 700pcm at 2.5% BUT you’ve only tied up 60k.

So you can buy two of these for the price of a Victorian. So your 120k will make you £1400pcm gross, not £900pcm. Plus of course the capital appreciation in the long run. HMO or smaller units, I know what I’d do if I was starting a portfolio or adding to a small one.

As always give me a call on 020 3397 2099 for a chat or drop me a line: jeroen@xandermatthew.com – always on hand to answer any property related questions.

STOP PRESS – 8.5% yield in Clapham – BUY NOW

If you aren't doing anything that will yield you 8.5% stop what you are doing and go and buy this flat.

Spotted on for sale this morning: A 3 bedroom maisonette with roof terrace for £275,000. They either got the price wrong or it’s earmarked for a sale TODAY!

Oaklands Place is just off St Alphonsus Road SW4, and there are probably only a bunch of flats above shops that are actually closer to Clapham Common Tube.

http://www.rightmove.co.uk/property-for-sale/property-49806079.html

Normally I would say it may be tricky to let as 2 out of the three bedrooms are a bit on the smaller side, but location prevails. It will let in a day surely. I put a conservative estimate of £450pw on it, but I think given the location a bidding war isn’t out of the question, especially with the Summer Rush taking place by the time you complete on this beauty.

It’s in immaculate condition and features outside space.

WHAT ARE YOU WAITING FOR!?

Call me the moment you’ve placed your bid as I’m keen to hear what you’ve secured it for. I’ll be keeping my eye on this one!

Drop me a line for further property talk on Jeroen@xandermatthew.com or call 020 3397 2099.

I had a brilliant chat with an investor landlord the other day

I received a brilliant response to last week's mailshot. Reason being it included the Quarter 1 property update. In case you had missed it please download it here.

I had a few landlords pop in over the last week and sit down with me for some advice, but one particularly stood out. He asked me for a moment of my time, which I happily gave him in order to discuss his property investment goals.

He was looking to re-invest some money after the sale of his other BTL property and was keen to hear more about the areas I had recommended previously in the Clapham Property Blog. Great news of course. He was after a relatively “safe” investment as the properties should remain fairly liquid due to the imminent need to sell them to help fund his children’s ambition to become homeowners also. A great move. We compared properties close to the station (in this case a lot of Victorian properties near Brixton and Clapham Tube) and properties a little bit further out near Tulse Hill, Streatham Hill and Brixton Hill. He mentioned to me the children might just keep the properties and live there themselves, but it would have to be something a bit easier on the eye, a Victorian, as opposed to a flat in a block – these would likely be sold to fund something “nicer.” “Buying something nice will cost you in yield” I said. And he agreed that in most likeliness the children wouldn’t like the flats he bought regardless of what or where they were. 90% certainty of a sale in 5 years’ time. We compared these two properties to predict gains further down the line:

Linom Road – 1bed – Near Clapham and Brixton Stations – Asking price £425,000, est. rental 360pw = gross yield of 4.4%.

http://www.zoopla.co.uk/for-sale/details/36498200

Glanville Road – 1bed – Bit further from Clapham and Brixton stations – Asking price of £279,950, est rental of £320pw = gross yield of 5.9%.

http://www.zoopla.co.uk/for-sale/details/33716975

As you can see from the above figures the yield on the second property looks much more appetising. This combined with my professional experience that “more affordable” properties are always easier to let that something top of the range (or bottom of the range for that matter) you will most likely enjoy less voids. Truth of the matter is that everyone “wants” to be close to a station but when it comes down to getting their wallet out there are very few who will shell out a substantial premium for this. Numbers are increasingly attractive when you consider that the first property will require a deposit of 85k (20%) and even then it will not satisfy most lenders’ criteria that the rental income must be 125% of the monthly interest payment. Calculation as follows: rent of £360pw = £18,720 annually, so interest payment (calculated at 5% as this is lending criteria now) cannot exceed £14,976 annually or £1,248 monthly, which means that the maximum loan would be 299520, leaving Mr. Investor to pay a higher deposit. £125,480 in fact as opposed to the £56k required to purchase property number 2, which easily meets the 125% rule (loan of £244,000 x 5% = £11,200 per annum; the annual rent of £16,640 is 149% of this so will pass with flying colours).

This combined with equal or greater capital gains (you will know from my previous articles that SW2 had a 2% bigger capital gain over the past five years) then we are on to a winner, in cash flow, capital gains and so forth. The difference will be considerable as property number 2 leaves Mr. Investor to purchase more property, again with more gains to be had there. The difference is substantial in the amount of money required to invest (56k vs 125k), leaving the investor to purchase 2 properties and not 1 when he follows my advice. More investments, more yield, more gains, more eggs in more baskets. A sensible approach to investing.

So as always please feel free to drop me a line, call me or pop in to the office on Clapham Park Road. The coffee is always hot and the chair always comfortable. Let’s talk property!

Jeroen Hoppe

Director

XanderMatthew

Your Pension and the Clapham Property Market

Pension rules are changing this April. It certainly ruffled some feathers and caused a flurry of enquiries to my inbox with people asking questions about it. This week, I want to look a little deeper into the subject of your pension and the Clapham property market. George Osbourne, in last years’ Budget, announced pension reforms that come into effect this April, which will give people with pensions unprecedented access to their pension pot and the freedom to look for alternatives. In a nutshell, after the 6th of April, anyone aged over 55 will be allowed to withdraw all or part of their pension pot and spend it as they wish. Until now, you were allowed to take out a quarter of it and were forced to buy an annuity policy with the rest.

However, my readers always know that I like to tell it ‘as it is’. There are always two sides to a story, good and bad. Let me tell you the bad news first. There are some hefty tax implications by taking money from your pension pot. As before, as per the old rules, the first 25% can still be withdrawn from the pension pot tax free but, here is the sting in the tail, if you take more than a quarter of your pot (25%), anything above that initial 25% level will be taxed as income. So if you took the whole lot out, the first 25% will be tax free but the remaining 75% will be taxed at your income tax rate of 20%, 40% (or even 45% if you earn over £150,000 a year)

.

.. and now the good news!

Under the old scheme, if you bought an annuity, when you died your annuity normally died as well. You would have no asset to pass on to your family. Also, the returns from pensions are awful at the moment. The best rates according to Hargreaves and Lansdown (big wigs in the City) state if you were 55 years old, the best rate you would get on your annuity pension would be 4.4% fixed for life (so it would never go up) or 2.2% but the payment would go up with inflation. The sort of rates (also known as yields in the property investing game) being achieved in Clapham are in the order of 2% to 4.3%. 

The other aspect of property investment is how the fact property values have risen consistently over the last 50 years. According to the Office of National Statistics, the life expectancy of a 65 year old male in Clapham is 18 years and 2 months. If we roll the clock back 18 years 2 months to January 1997, property values in Clapham have risen by 474.05% to today .. you wouldn’t have had that with your pension! But this is the biggest win, even by taking a hit in income tax now, by buying a property, you buy an asset that you can pass on to your family when you die.... (or the cats home if they aren’t nice to you!).

So where next? It totally depends which strategy you are going to look at, one strategy is to look to achieve relatively small rental returns (ie low yields) in an up market area which has decent capital growth or, alternatively, another strategy is to buy properties in not so good areas known to produce a high returns (ie high yields) but low capital growth (ie how much the value of the property goes up).

So if you want to hear more drop me a line and make investing a worthwhile task.

Jeroen Hoppe
Director
XanderMatthew

Close to Clapham South - another high yielding investment opportunity - Clapham SW4

Love them or hate them, from an investment point of view they are proving very popular with our clients.

More and more renters are priced out of period conversions and with the growing trend of flat-sharing longer and longer (it is taking longer of course for people to settle down with Mr/Mrs right in their own place) the demand for bigger units is only going to rise.

We estimate a rental return of £450pw in average condition, but with no internal photos on show this one may need some TLC. Nonetheless nearly 6.2% @ asking price, so I trust this flat will be popular.

Check out the full details here

This estate is close to Clapham South tube so offers excellent links to the underground (zone 2/3 border), Balham High Road and Clapham High Street for local bars and restaurants as well as Clapham Common itself for recreational use. Ideal for renters in their 20s.

Drop me a line if you are looking at an investment and you need another pair of eyes or by all means call the office on 020 3397 2099.

Jeroen Hoppe
Director
XanderMatthew

£1000pw with nearly 7% gross yield - Clapham SW4

£1000pw with nearly 7% gross yield

Kosta Giannakakis MARLA

Branch Manager at XanderMatthew

Currently for sale is this 6 bedroom house on Aristotle Road SW4. An ideal buy-to-let if you are able to go the extra mile and comply with HMO regulations. I classify this property a good find for professional sharers, offering excellent living accommodation (1500sqft) with mostly large double bedrooms. The property includes the necessities such as garden, garage and a nice open-plan kitchen/living, features that professional people will be considering upon their search. You won’t secure a better location to invest in, with this particular property situated right next to the underground tube (Clapham North) station and within close proximity of Clapham High Street which offers an array of fine restaurants, bars and the vibrant nightlife one seeks within this location. This is an exceptional opportunity for investment purposes, resulting in a high yield and attracting the finest tenants. I estimate £1000pw, yielding nearly 7% at asking price. Properties of this size are rare and will be snapped up very quickly by a group so low voids are nearly guaranteed. Definitely one for the shortlist. Give us a call on 020 3397 2099 for a price update on your current rental property if you think your tenancy is expiring in the next few months or drop me a line on email.

Click here to see the investment property in question

Onthemarket.com? You mean off the market, surely!

Rightmove and Zoopla and now.... onthemarket.com. Some of you may have heard about the latest brainchild of Agents' Mutual - a consortium of agents that got together with the idea of taking on the great portals - but most of you won't, and that’s my point.

So what's happening?

In essence a few agents have been disgruntled by the annual price hike that presents itself from the big 2 and decided to chance it on their own. Build their own website, do a TV campaign to attract the would-be buyers, job done, surely. Well if everyone thought like that about growing their own vegetables (much cheaper than the likes of Tesco surely) why isn't everyone doing it? For a start the investment required runs into the millions of pounds. They won't see these "savings" for some years to come to say the least. Secondly, the success of any agency big or small hangs on its ability to shift houses. With less exposure on their properties (this new portal cannot possibly get as many hits as Rightmove or Zoopla for years to come) there are less buyers/tenants looking at their properties. This results in less enquiries. Less viewings. Less offers. Less transactions. Less customers that recommend said agent due to poor results. Less income for the agent. Oh look I see a trend.

In the best interests

An agent should always handle their affairs in the best interests of their clients which they represent of course. Drastically reducing the level of exposure that their clients' properties get is arguably not.

The cold hard facts

Let's do a test for our core areas, namely SW4 and SW2.

	For Sale		To Let
Area	SW4	SW2	SW4	SW2
Rightmove	279	420	296	209
Zoopla	205	269	209	258
OntheMarket	84	115	78	35

As is plain to see there are lots more agents that are still on Rightmove and Zoopla than OntheMarket, which is obvious of course. There are never going to be as many properties on day 1. However it will be interesting to see how this changes over time. But bear in mind that if you haven't heard of this new portal, neither will your new tenants or buyers. Even with property listed... where are the buyers looking??

Costs

Rightmove and Zoopla, as any other company, make a charge for their services. These prices certainly increase from time to time. Why? Well, there is inflation, a wider range of services on offer and guess what, everything gets more expensive year on year. Remember penny sweets? Right...

Flop? 

Now believe me I'm all for value for money, but to spend millions of pounds to save a few quid is just nonsensical. What's more, it doesn't serve the best interests of clients. So will I be joining? I will be a few hundred pounds better off today, but tomorrow when the sales and lettings don't materialise because tenants and buyers are looking on Rightmove and Zoopla I will be significantly worse off with less customers and less money in the bank. So no, in summary. Has your agent dropped a well-known, established brand for onthemarket.com? With the figures above it is clear where other agents are, and where the buyers and tenants will be looking for their next home.

What do you think?

Another great investment property!

Well, Christmas out of the way and it’s back on the investment bandwagon! I hope everyone had a welcome break. It certainly looks like the December blues are gone in the London property market and there are some lovely properties to be had.

I came across this particular one with Andrews the other day and I must say it is a charming flat. We have let before in Chalmer’s House and can assure despite it’s rather typical 1930s Art-Deco looks it boasts a host of other things. Rooms are spacious and there is a gym and a roof terrace for residents to enjoy. A lovely property to live in and hence popular with tenants, despite being a little further from Clapham Junction than one would like. Appealing to a slightly more mature tenant who can appreciate better value slightly further from the station this one is sound to attract a good quality tenant. Estimated rental income £350-£375pw, making this one yield 4.9%-5.2% gross at asking price. Not the highest yield in the world, granted, but looking at the photos there is not much more to do than furnish it with some good quality furniture. Bathroom, kitchen and general décor is A*. Happy bidding fellow investors! http://www.rightmove.co.uk/property-for-sale/property-32411193.html

If you've spotted a buy-to-let opportunity or need impartial advice regarding your current property portfolio, feel free to give me a call on 020 3397 2099 or email me at jeroen@xandermatthew.com.

6.8% rental yield in Clapham South

This four bedroom flat in Poynders Garden SW4 has just come onto the market with Foxtons, at an asking price of £399,950.

http://www.rightmove.co.uk/property-for-sale/property-49501853.html

Finished to a reasonable standard, with four good size double bedrooms, a large reception room, and within easy walking distance of Clapham South (Northern Line) and Balham (London Victoria), the property would make an ideal home for professional sharers. 

After studying the floorplan and noting the lack of a bathroom photograph, it seems unlikely that it includes a shower - something most sharers would consider essential. A bathroom refit should be considered if you want to make the property as attractive as possible to prospective tenants. After making minor changes a weekly rent of £525 would be achievable, offering a 6.8% yield at asking price. The recent stamp duty reform also represents a saving of £2,000 when compared to the old 'slab' system.

If you've spotted a buy-to-let opportunity or need impartial advice regarding your current property portfolio, feel free to give me a call on 020 3397 2099 or email me at jeroen@xandermatthew.com.

How will stamp duty reform affect the Clapham property market?

The big news from George Osborne's Autumn Statement was a complete overhaul of the stamp duty system. The old "slab structure" has been replaced with a sliding scale along the same lines as income tax, with different rates applying only to the portion of the property price within each band.

From today, this means:

• No stamp duty will be paid on the first £125,000
• 2% is paid on the portion up to £250,000
• 5% is paid on the portion up to £925,000
• 10% is paid on the portion up to £1,500,000
• 12% is paid on anything above that

For the majority of buyers across the UK this can only be a good thing, with stamp duty decreasing or remaining the same on all purchases below £925,000. 

But what does it mean for the property market in Clapham?

There are currently 340 properties for sale within the SW4 postcode.

Of these, 33 fall within either the 250k-300k or 500k-550k range. The reform represents good news for the sellers of these properties, as under the old system their true value was often distorted due to buyer's reluctance to offer above the thresholds, where the increased rate applied to the entire value of the property (3% at 250k and 4% at 500k). 

With many buyers struggling to raise a large enough deposit to secure a mortgage, the reduction in stamp duty from £7,800 to £3,000 on a £260,000 property will have a significant impact, with greater demand anticipated in cheaper areas such as the Solon New Road Estate and the Clapham Road Estate. First time buyers will hope to compete for properties which would usually be snapped up by buy-to-let landlords.

Clapham will, however, feel the negative effects of the reform far more than neighbouring Brixton and Stockwell. In upmarket areas such as Abbeville Village and Clapham Old Town, buyers are going to feel the pinch, and this could have a knock-on effect further down the chain.

95 properties in SW4 are on the market with asking prices in excess of £925,000. The majority of these are 4+ bedroom family homes on streets such as Cautley Avenue, Narbonne Avenue and Lillieshall Road. 40 of the 95, on streets such as The Chase and Macaulay Road, have asking prices in excess of £1,500,000. At that level, buyers are at least £18,750 worse off. It's fair to assume that in the short term at least, they may look to offset this loss by making slightly lower offers.

If you have any questions regarding the stamp duty reform, or you'd like to know how it might affect your property, give me a call on 020 3397 2099 or email me at jeroen@xandermatthew.com.

You can calculate the stamp duty on your property purchase here:
http://www.hmrc.gov.uk/tools/sdlt/land-and-property.htm

Buy-To-Let in Streatham Hill

This two bedroom flat in Streatham Hill has been on the market with Haart for just over a month, and was reduced today from £295,000 to £288,000.

http://www.rightmove.co.uk/property-for-sale/property-46638283.html

The ground floor flat in Balcombe House, SW2 is within walking distance of Streatham Hill station (for London Victoria) and offers two good size double bedrooms as well as a large reception room. In the current rental market it could be expected to achieve £1,400pcm, offering a 5.8% yield at asking price. 

It's not uncommon for properties in the £250,000 - £300,000 range to have difficulty attracting buyers because of the stamp duty threshold. It's likely that the vendor would entertain offers lower than the asking price, enabling a buy-to-let investor to maximise their yield.

Thinking of buying, selling or letting? Ask my opinion with no obligation by giving me a call on 020 3397 2099, or email me at jeroen@xandermatthew.com.

Development opportunity on Cavendish Road

The lots for December's auctions have been released, and this four bedroom property in Balham SW12 looks to be one of the best opportunities available for developers and investors.

http://www.rightmove.co.uk/property-for-sale/property-32958450.html

The property on Cavendish Road goes under the hammer on Wednesday 10th December with Auction House London, with a guide price of £675,000. It's available with 124 years remaining on the lease, and planning permission has already been granted to create a separate lower ground floor two bedroom flat in addition to extending the existing two bedroom garden flat. 

With its enviable location close to Clapham South Tube (Northern Line) and The Common itself, two bedroom period flats on Cavendish Road can fetch anywhere from £500,000 to £700,000, depending on condition and outside space. 

Viewings can be booked with Auction House London (020 8012 3603) and are scheduled for the following times:

Thursday 27th November 14:30

Monday 1st December 13:30

Thursday 4th December 14:30

Monday 8th December 13:30

If you have your eye on a development or buy-to-let opportunity, why not get a second opinion? Email the Rightmove or Zoopla link to jeroen@xandermatthew.com and I'll be happy to give you my thoughts.

Buy-to-let with 6%+ yield

Something a bit different for the blog today, as it's the first time I've posted a property that's on the market with my own agency! Trust me, if you're a buy-to-let investor it's worth a look. The property in question is a three bedroom ex-local authority flat on the market with an asking price of £335,000, and is available chain free for a prompt sale.

http://www.rightmove.co.uk/property-for-sale/property-49079678.html

With three good sized double bedrooms and a large reception room, it would be an ideal home for professional sharers. Located in Camberwell SE5, the property is within easy walking distance of several stations as well as Kings College Hospital. It could be expected to rent for £390 per week, offering a 6% yield at asking price.

Thinking of buying, selling or letting? Why not ask my opinion with no obligation? Email me in confidence at kevin@xandermatthew.com or call me on 020 3397 2099.

Auction Lot: Victorian terraced house in Balham SW12

This four bedroom Victorian terraced house on Calbourne Road is available via Barnard Marcus Auctions and goes under the hammer next Monday 17th November, with a guide price of £775,000. 

http://www.rightmove.co.uk/property-for-sale/property-48977084.html

Calbourne Road is very highly regarded. Located within a few hundred yards of Wandsworth Common and Balham stations it offers an easy commute to London Victoria and London Bridge via the Northern Line. The property is comprised of four bedrooms, two reception rooms, cellar, kitchen, bathroom and rear garden. Requiring complete refurbishment, a developer could turn it into a superb family home and see a sizeable return on their investment. 

Given that an immaculate four bedroom property on the same road recently sold for £1,365,000, my advice would be to go and take a look. Barnard Marcus are conducting viewings at 10.30am on Wednesday 12th and Friday 14th November.

SOLD: August 2014

http://www.rightmove.co.uk/house-prices/detailMatching.html?prop=39327772&sale=52152977&country=england

If you're a developer or landlord who's spotted an investment opportunity, email me the web link to kevin@xandermatthew.com and I'll be happy to give you my honest opinion. 

The best ex-local flat I've seen in a while. A stunner

Those were the words of one of my colleagues in the lettings department when he came across this property this morning. I'd have to agree.

http://www.rightmove.co.uk/property-for-sale/property-48961985.html

At almost 1,000 sq. ft. with three good size double bedrooms, a study and large reception room all finished to an excellent standard, this Brixton flat would make a superb home for professional tenants. The block itself is well maintained, as is the surrounding area, and lies just 400 yards from Brixton tube (Victoria Line). 

Available for offers in excess of £375,000, the flat would fetch £475 per week in the current rental market offering an attractive yield of 6.6%. 

If you're thinking of purchasing a buy-to-let or development property then why not ask my opinion with no obligation? Email me in confidence at kevin@xandermatthew.com or call me on 020 3397 2099.

How much? £144,000 annual salary needed to buy in Wandsworth.

I came across this article in The Wandsworth Guardian this morning and thought it was worth sharing. In order to buy an average Wandsworth property, an individual or family has to earn an annual household income of £143,534. 

Northcote Road in Battersea

The stats are perhaps slightly exaggerated. In the current sales market the average buyer usually has a deposit considerably higher than the 5% quoted, often supported by The Bank of Mum and Dad who worry that it's a case of "now or never" for their child to get on the property ladder. Regardless, the figures are still staggering.

The good news for buy-to-let landlords is that with more and more young professionals and families resigning themselves to renting for the foreseeable future, there are excellent opportunities for both high rental yield and capital growth. If you come across a property that interests you on Rightmove or Zoopla, send the link to me at kevin@xandermatthew.com and I'll be happy to give you my honest opinion.