Fewer Buyers in the South London Market, but Sellers Undeterred

The housing market in the UK is showing signs of cooling, as the number of buyers in the market decreases. However, sellers are still reluctant to reduce their asking prices, leading to a mismatch between supply and demand. Yes indeed, Londoners are among the most STUBBORN of home sellers when it comes to the value of their home. The property is only worth what someone is willing to pay for it AT THAT POINT IN TIME. I've been doing this for 20 years and trust me when I say that willing it to be worth more does not make it so...

Chestertons event reported that the number of buyers registering with the agency fell by 3% in July compared to June. The number of properties for sale also fell by 1%. The average time it took to sell a property in London was 52 days, which is up from 47 days in June. Quicker than the national average, mind.

Matthew Pointing, Chestertons' head of research, said that the housing market is "showing signs of cooling" but that sellers are "still holding out for strong prices. The combination of rising inflation, interest rates and the ongoing uncertainty in the global economy is starting to weigh on buyer sentiment," he said.

Pointing said that he expects the housing market to remain competitive in the coming months, but that there could be some "modest price falls" in some areas. The factors that are driving the slowdown in the housing market include the rising cost of living, the increase in interest rates, and the uncertainty caused by the war in Ukraine. The rising cost of living is making it more difficult for people to afford to buy a home, while the increase in interest rates is making mortgages more expensive. The war in Ukraine is also causing uncertainty in the global economy, which is making people less likely to make major financial decisions, such as buying a home.

Despite the slowdown, the housing market in London remains strong. The average asking price for a property in London is now £650,000, which is up 10% from last year. This is due to the limited supply of housing in London and the strong demand from both domestic and international buyers.

It remains to be seen how the housing market will develop in the coming months. However, it is likely that the market will remain competitive, as sellers are unlikely to drop their asking prices. They will simply have to cope with a slower sale, or no sale at all as research shows that only HALF of properties listed ever get sold. Let that sink in...

If you are looking to sell then don't be dazzled by high asking prices and low fees - be realistic and understand that you may have to take a bit of a haircut to get moving. Remember that moving up the ladder this is entirely to your benefit. Losing 10% of £500k and winning 10% of £1m is a net positive!

If you are after a realistic, actual valuation of your home then do drop me a line.

Interest Rates Hit Highest Level Since 2008: What Does This Mean for Homeowners in South London?

The Bank of England has raised interest rates to their highest level since April 2008, in an effort to cool the UK's rising inflation. This is likely to have a significant impact on homeowners in South London, who are already facing rising property prices and rents.

The impact of higher interest rates will vary depending on individual circumstances. However, in general, homeowners with variable rate mortgages will see their monthly payments increase. This could put a strain on household budgets, particularly for those who are already struggling to make ends meet.

Homeowners with fixed rate mortgages will not see their monthly payments increase immediately. However, they will be locked into their current interest rate for the duration of their mortgage term. If interest rates continue to rise, this could mean that they will be beating the rate that variable rate customers are paying - but for how long? When they come off their fixed rate, and many are going to do just this in the next 12 months - they will be in for a trebling of their mortgage payments!

The rise in interest rates is having a negative impact on the housing market. It is already leading to a slowdown in house price growth, as buyers become more cautious about making large purchases. It is making it more difficult for first-time buyers to get onto the property ladder.

For homeowners in South London, the rise in interest rates is a double whammy. Not only are they facing higher mortgage payments, but they are also likely to see their property value decrease. This could make it difficult for them to sell their home if they need to move. Or at least, at a price they had in mind (last year's price)!

There are a number of things that homeowners can do to protect themselves from the impact of higher interest rates. These include:

• Reducing their monthly outgoings: This could involve cutting back on unnecessary spending or increasing their income.
• Refinancing their mortgage: This could involve switching to a fixed rate mortgage, which would protect them from future interest rate rises.
• Building up an emergency fund: This would give them a buffer to fall back on if they experience financial difficulties.
• The rise in interest rates is a challenging time for homeowners. However, by taking steps to protect themselves, they can minimize the impact on their finances.

In addition to the points mentioned above, here are some other things that homeowners in South London can do to prepare for higher interest rates:

• Get a professional valuation: This will give you an idea of how much your property is worth, which will be important if you need to sell in the future.
• Keep an eye on the market: Monitor property prices and interest rates so that you can make informed decisions about your finances.
• Talk to your mortgage lender: If you are struggling to make your mortgage payments, talk to your lender as soon as possible. They may be able to offer you some help or advice.

Are you interested in the value of your property? If you are curious as to what your rental property is worth today why not drop me a line and pick my brains or use my free online valuation tool to get a ballpark figure!

South London Property Owners Spooked by Market Turbulence

New research from Bloomberg Intelligence highlights a 'spooked' market, where homebuyers are having to make sacrifices. The UK property market has been spooked by a number of factors in recent months, including rising interest rates, the cost of living crisis, and the ongoing war in Ukraine. This has led to a decline in demand for property, particularly in South London, where prices have been among the highest in the country.

As a result, many South London property owners are feeling spooked about the future of their investments. 50% (56% in October) of that group intend to purchase a house in 1-2 years (BI’s survey only includes those looking to complete within the next two years), a further 28% (27%) want to go execute on a deal in 7-12 months, with 17% (12%) preferring 4-6 months. Only 32% of buyers with unchanged schedules aim to complete in the next six months (only 25% in London). The market is likely to remain volatile for the foreseeable future, so it is important for South London property owners to be aware of the risks and to adapt their plans accordingly. 

Home buyers who are pausing or delaying their homebuying plans cited elevated mortgage rates (30%) or the high cost of living (22%) as the most pertinent issues. Some buyers delayed their buying plans (16%) while waiting for house prices to decline, with a smaller group (14%) also worried about the economic outlook.

So what to do? Having worked in London property for 20 years I can assure you that Londoners are the last people to relent to having to drop their asking price. A wrong mentality in my opinion because it slows the market down and actually causes further price drops in the long run. A 10% reduction on a £500,000 sale in order to acquire a £1m property at £900k is still a net gain of £50,000 by my maths. So if you are looking to move up the ladder be firm with your onward offer and explain that you have to reduce in order to make the move otherwise it's not going to happen. A win-win for all I'm sure (providing the end of chain is motivated to sell - moving upwards or not).

If you are considering selling, or maybe you're on the market at the moment and you'd like to know more then drop me a line and let's have a chat. Have you used my free online valuation tool?

Rental Market in South London Isn't Working for Anyone!

The lettings market in South London is in a state of flux. Rents are rising, but demand is through the roof. This is putting a strain on landlords and tenants alike.

Rents are rising

Rents in South London have been rising steadily for the past few years. In the past year alone, rents have increased by an average of 20%. This is putting a strain on tenants, who are struggling to afford the rising cost of living.

Supply is falling

As you'll know from my other posts the number of landlords selling up is on the rise - build to rent schemes are popping up a little more frequently but gone are the days where you could rent an affordable victorian property from someone who had a flat as a simple buy to let investment... Landlords are struggling because of onerous legislation and higher interest rates, they are exiting!

Tenants are suffering

The rising rents and falling demand are also making it harder for tenants to find affordable homes. Many tenants are being forced to move out of South London, or to share with more people. This is making it harder for tenants to find a home that meets their needs.

What can be done?

There are a few things that can be done to improve the lettings market in South London. These include:

• Building more affordable homes: The government needs to build more affordable homes to meet the needs of tenants. This will help to reduce the pressure on rents and make it easier for tenants to find affordable homes.
• Reforming the lettings sector: The government needs to reform the lettings sector to make it fairer for both landlords and tenants. This could include measures such as introducing a national landlord register and giving tenants more rights.
• Educating tenants: Tenants need to be better educated about their rights and responsibilities. This will help them to negotiate better deals with landlords and to protect themselves from unscrupulous landlords.

The lettings market in South London is in a difficult situation. Where does this leave you? If you are curious as to what your rental property is worth today why not drop me a line and pick my brains or use my free online valuation tool to get a ballpark figure!

Selling? Beware of This Common Mistake Made by South London Home Sellers

Changing times

The housing market in South London is changing. While sales volume has returned to pre-pandemic levels, lending is down significantly. This suggests that buyers are becoming more cautious and are relying on higher deposits to fund their purchases. Where is this money coming from? Well, bank of Mum and Dad of course. But as they remortgage their house to gift deposits or withdraw from pensions they are running out of funds! "It's a worrying time for the housing market, as rapidly rising mortgage rates mean fewer people can afford to buy for the first time or take the next step on the ladder." - Kimberley Gates, Head of Corporate Partnerships at Sirius Property Finance.

Beware

On the face of it this is good news for buyers, as it means that they have more bargaining power. Sellers are more at the mercy of buyers' affordability. However, it is also a warning to homeowners who are looking to sell their property. If you price your property too high, you may find that it sits on the market for months or even years. Well, surely you're sensible enough to realise if you haven't sold it within 3 months then something is wrong...

Sense over Cents (or pence)

So, how can you price your property sensibly? Here are a few tips:

• Start by getting a valuation from a qualified real estate agent (like me). This will give you a good idea of what your property is worth in the current market. You can also use an online tool just to give you a rough guide as a start.
• Be realistic about your expectations. The housing market is not what it was a few years ago. Buyers are more cautious and are relying on higher deposits. Are you selling a 1bed at 400k? with a 25% deposit the buyer would be borrowing £300k at 5.5% or thereabouts which is £1843 per month! That's excluding any moving costs and finance and legal fees... I'm sure you'll agree a 1bed doesn't cost £1843pcm to rent, and when they're renting Mr. Landlord pays for repairs. An intriguing proposition!
• Be prepared to negotiate. If you price your property too high, you may have to negotiate with the buyer. Be prepared to compromise on the price or on other terms of the sale. be happy they've made an offer as getting people through the door is hard work when the price is too high.

On the valuation side be advised that an agent will be pricing your property through a buyer's eyes...

• The location of your property is important. Properties in desirable areas will sell for more than properties in less desirable areas.
• The size of your property is also important. Larger properties will sell for more than smaller properties.
• The condition of your property is also important. Buyers will be more willing to pay a premium for a property that is in good condition, one that they don't have to do anything to.
• The features of your property are also important. Period features such as coving, fireplaces, stained glass etc. Your agent will be photographing these for the lifestyle shots.

So in summary - price sensibly to get people through the door. A sealed bids situation is much better after an open day than tumbleweed and nobody turns up, and in my experiene the latter happens when you price too high. Free valuation here, have a look what AI tells you and then get a second opinion!

Interest rate hikes could mean opportunity for South London Property Investors

Everyone is selling up - but should they?

The Bank of England's latest interest rate hike is likely to lead to more landlords selling their properties, but it could also create opportunities for investors. A survey by Finbri found that 45% of landlords would sell their investment properties if the base rate reached 5%. With the rate now at 5%, it's likely that even more landlords will exit the market. This could create a shortage of rental properties, which could drive up rents. This would benefit investors who are looking to buy properties to rent out. In addition, the number of properties available to rent has fallen by a third in the past 18 months. This means that there is already a high demand for rental properties, and the shortage is likely to make it even harder for renters to find a place to live.

This can can create opportunities for investors who are willing to do their research and take on some risk. Or keep taking on risk and hold on to their investments.

Property will remain profitable

Some property commentators predict that house prices will fall in 2023. However, even if this happens, property will still be a profitable investment. This is because property investors will still receive rent, and they may also be able to claim (some) tax breaks. In addition, the UK population is still growing rapidly. This means that there is a growing demand for rental properties, even if the supply of rental properties decreases.

The rental market

The rental market is expected to remain strong in 2023. This is because the supply of rental properties is still short of demand. In addition, the pandemic-induced tenant eviction bans have led to many landlords leaving the market. As a result, rental prices are expected to continue to rise in 2023. However, the rate of price growth will vary by region. London and the Southeast are expected to see the lowest growth, while the regions are expected to see the highest growth. But what other investments can a South London investor turn to? 2022 was a poor year for global stock markets. This was due to a combination of factors, including high inflation, the ongoing war in Ukraine, and poor global growth prospects. While some may argue that stock markets can give good returns over time, I believe that the risk of losing money is too high. In addition, stock markets do not provide physical assets such as property.

The key to a successful investment portfolio

The key to a successful investment portfolio is being well-informed and following a solid strategy. This includes understanding the risks involved in different types of investments and diversifying your portfolio to reduce your risk. It is also important to remember that investments can go down as well as up. Therefore, it is important to have a long-term investment horizon and not to panic sell if the market experiences a downturn.

If you are looking to exit the market, stay in the market, or expand in this market get in touch and let's talk investments. Not relet your property for a while? Why not check out my nifty online valuation tool to see what your property is worth at the moment?

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!

Clapham - a buyers' or a sellers' market??

It's an age old imbalance. Is the "market" in favour of the buyer or in favour of the seller? To find the answer we need to stop and think what determines the market.

What?

A market is a place where goods are offered and are purchased by "ready, willing and able" buyers. In this case your zoopdiloops and Leftmove, otherwise known as the property market. Properties are offered to x number of buyers that are looking and if the right buyer presents itself, and they see value in the proposition, they purchase at the (asking) price. Should the buyer not see value they will not buy. If the value is perceived to be good a seller can expect a number of bids.

Buyers and sellers

Is that all it boils down to? Well yes, but maybe if you zoom in it's more nuanced than that. For instance if a property requires renovation you will often need to subtract the cost of the works and then some to allow for someone to put in the time and effort to actually renovate it (time isn't free, you know!) and in the case of a developer some more margin for finance costs and stamp duty and so on (again, they do this for a living, certainly not for free).

So if there are MORE properties coming to the market this increases supply. Prices will therefore "soften" or come down if there are the same number of buyers looking for a property in this market. You can see by my clever graph that Clapham has been fairly balanced for a while now, with just under half (35%ish) properties marked under offer. Should the market be busier the number of properties available dries up and you have the same number of buyers chasing fewer properties.

But what about times ahead? Mortgage rates are high - will they go higher? Remember the average property price in Clapham is considerably higher than the rest of the UK, so an increase in interest rates will certainly have an impact on affordability. I have found in my experience that buyers borrow the maximum they can and if they are searching for property soon or even now they might have a little bit less to spend on the purchase because they simply can't afford the higher repayments!

Property prices will plummet?

If we indeed see rates rise and affordability reduce then a correction will be in order. The property prices will see a small drop. I wouldn't say any property in London will plummet per se. In fact I foresee that demand will stay rather strong. It's more than likely that the trend of the past decade - the Bank of Mum and Dad - will simply step in and offer larger deposits for their offspring to keep mortgage payments in check. After all they are sitting on a lot of equity that is not being utilised per se. What will really happen? Time will tell; but for now I will continue to be selling property in South London, duty calls!

If you are looking to sell or let your property in South London then by all means get in touch for a valuation by email or check out my nifty online appraisal tool if you just wanted a rough idea on value!

Clapham ‘Home Owning’ Movers and Shakers in 2018

It’s now commonly agreed amongst economists and the general public that the dramatic rise in Clapham property prices of the last six years has come to an end.

Read the National newspapers, and they talk of doom and gloom in the British housing market with such things as strained buyer affordability (as property prices have increased over the past six years at a far faster pace than average salaries), a lack of new properties being built and the Brexit uncertainties over the last two and half years being blamed for the slow down - yet in the last 12 months, people have still been moving, buying and selling in Clapham at levels similar to the last six years - something tells me we have a case of ‘bad news selling newspapers’.

So instead, let me share with you what, exactly, is happening in the Clapham property market, and more specifically, who is moving and why in Clapham. Most of the sales in Clapham over the past year were flats, which on average sold for £571,150. Terraced properties had an average sold price of £1,246,050 and semi-detached properties averaged at £1,586,600.

In Clapham in the homeowner sector in 2018 (i.e. owner occupation), 309 households moved within the tenure (i.e. sold the home they owned and bought another one) and 60 new households were created (i.e. they moved from living with family/friends and bought their first home without privately renting).

What does this mean for Clapham buy to let landlords? Well looking at the graph, it appears bad news for landlords. There were 144 households that moved into the home owning (owner occupation) tenure from the private rented sector, whilst on the other side of the coin, 113 Clapham households moved to the private rented sector from owner occupation … which appears on the face of it, a reduction in the private sector.

My research has calculated that in 2018, an additional 150 new households in the Clapham private rental sector were created

...and it will continue to grow at those levels for the foreseeable future.

I have one final thought and opportunity for you Clapham property investors. 75 owner occupied households in Clapham sold in last year where the homeowners had passed away. These properties can be a potential goldmine and offer great returns. The reason being is some members of the older generation who have owned these homes for decades have spent money on high capital items (double glazing / central heating etc.) but not spent money on more superficial low-ticket items such as up to date carpets, kitchen, bathroom and decorating (vital if you want to sell your property for top dollar). These properties can often be bought cheaply because most buyers can’t see past the avocado or brown bathroom suite from the 1970’s and the dated decor, so if you were to buy wisely and do the works, you could sell it on for a healthy profit.

So, whatever is happening in the world with Brexit, Trump, China, and the Stock Market … the Clapham housing market is in decent shape for the medium to long term. If we do have small corrections in values in the next 12 to 18 months, in the long term, house prices have always returned ... and returned with vengeance. Like I say to anyone buying a property, be they a first time buyer, landlord or homeowner ... property is a long game ... and if you play the long game, you will always win (although isn’t that true in most aspects of 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.

Clapham Property Market - Summer 2018 Update

I was recently reading a report by Rightmove that a North South Divide has started to appear in the UK property market – so I wanted to see if Clapham was falling in line with those thoughts. In the North, there are 7.12% less properties on the market than 12 months ago, whilst in contrast, in the South, there are 14.7% more properties on the market than 12 months ago.

With the decline in the number of properties for sale in the North compared to 12 months ago, that means the North is more of a sellers’ market. However, on the other side of the coin, there is a significant rise in buyer choice in all of the Southern regions, showing there are signs of a buyers’ market, which in some markets is a driving force for a buyers’ market and some downwards price pressure.

So, looking closer to home at asking prices and the number of homes on the market. In the London region, according to Rightmove, the average asking prices of new to the market properties are 1% lower than 12 months ago and 0.9% lower over the last month. Now I must stress, this is asking prices – not what is happening to actual property values. However, regionally, there are 16.4% more properties on the market than 12 months ago.

Even closer to home, overall, the number of properties and building plots for sale in Clapham has increased by 3%, going from 823 properties for sale a year ago to 847 properties for sale as I write this article, meaning Clapham does in fact match the regional trend.

Looking at the individual types of Clapham property, you can quite clearly see the different markets within Clapham. The two sets of figures that stand out are the increase in both Detached properties and Terraced/town houses for sale, rising 20% and the decrease in Semi-detached properties by 10%.

Although these figures don’t tell the whole story because in certain areas of Clapham, certain types of properties (particular locations and Primary school catchment areas) are in short supply. This has caused some frustration with buyers of those types of properties with this lack of supply, which in turn has sparked some very localised asking price growth within those hot spot areas, although sometimes to levels where sellers optimism turns into silly over the top asking prices.

This means the property sticks, which isn’t sustainable, therefore as a consequence, there are certain parts of the Clapham housing market with upward asking price movements being offset in part by intermittent asking price reductions where home owners or their estate agents have been over optimistic with their initial marketing asking price.

What does this mean for homeowners and landlords in Clapham?

If you are planning to sell your home or buy to let investment, the key for determined sellers is to set your asking price correctly from the start. It’s so vital to be competitive to attract buyers. Everyone has access to three main property portals (Rightmove, On the Market and Zoopla) so can easily compare your property against similar ones. When you do search these portals, make sure you ask the website to show properties that are sold subject to contract as well to check what properties are selling for in your neighbourhood. Unless you have something highly unusual or unique, this perhaps isn’t the best market to set an optimistic asking price in hoping to find someone who would pay that silly price.

And if you are buying in Clapham? The numbers of buyers are lower than a few years ago, although those buyers that are in the market have become quite serious. The times of time wasting “carpet treaders” (estate agency slang for the same type of people car dealers call tyre kickers) are long gone. Those buyers that are in the market are real buyers, wanting to buy, but only at the right price. We live in a 21st century society that is “time-poor” so nobody is wanting to even view a house, let alone pay over the odds if they believe the asking price is too high. So, if you are buying, do your homework, ask plenty of questions of the agent, find out the motivation of the sellers and the real reasons behind why they are moving ... and you might just bag a good deal?

2.6% Drop in the Clapham and Lambeth Property Market

The number of residential property transactions in Lambeth will be 2.6 per cent lower in 2018, compared to 2017.

According to my research, the seasonally adjusted statistics for our local authority area suggest with the number of properties already sold in 2018, and the number of properties currently under offer or sold subject to contract (allowing for property sales to fall through before exchange of contracts) we, as an area, will end the year 2.57 per cent lower compared to 2017.

So why are transaction numbers so important to Clapham homeowners, Clapham landlords and potential first-time buyers?

Many economists and property market commentators believe transaction numbers give a more precise and truthful indicator of the health of the property market than just house values. In the six years before the Credit Crunch in 2007/8, the average number of completed property transactions in the local area (the local authority covered by Lambeth) stood at 5,896 per year .. yet in the three years following the Credit Crunch, on average, only 3,147 homes were changing hands per year in the area.

Roll the clock forward to more recent times and last year, in 2017, 3,827 homes changed hands (i.e. transacted and sold) in the area, not far off the local authority’s 23 year overall average of 4,861 homes per year.

In the past, a reduction in the number of properties selling has often been believed to be the first signal of a down turn in the housing market as a whole. Although, the down turn of the credit crunch years (2007/2008) was more a free-fall than a subtle down turn. Look at the graph and the ‘so-called’ halcyon days of the 2000 to 2006 property market were a roller coaster when it came to the number of transactions. House prices were rising in the six/seven years before the credit crunch (2000 to 2006), albeit, the rate of growth of Clapham house prices did slow in late 2005 and 2006 (which does fit in nicely with the graph).

In other articles, I have mentioned the change in the number of houses for sale today compared to last year and further back. Although, the market has seen in recent months (i.e. the short term) an increase in the number of properties for sale, fundamentally, in the medium term, there has been an underlying trend in the reduction of properties coming onto the market for sale in Clapham (and nationally) and this has been one of the main drives behind the lack of properties selling .. Clapham people aren’t moving as much as they were 30 years ago meaning fewer houses are selling each year.

However, this short-term increase in properties for sale hasn’t been even across the board. In certain sectors of the Clapham property market, there is a glut of properties on the market at the moment and so prices and values are dropping on those types as sellers compete for the limited amount of buyers… yet, there are other sectors of the Clapham property market where there is a dearth, a shortage of property, and buyers are fighting tooth and nail with silly offers to try and secure the sale. This means, there are some bargains for you Clapham buy to let landlords. If you look hard enough, you could spot the same trends I have seen in Clapham and find the individual property micro markets that fall into that first sector (with its glut).

So, if you want the inside track on the Clapham property market, whether you are a landlord of ours or another agent, I am more than happy to guide you in the right direction if you drop me a line or an email (contacts details are easily found on this page – and I don’t bite or do hard sell – promise!).

So, to conclude, I believe we will finish on 3,729 housing transactions by the end of the year in the area .. not too far off last year’s figure. Looking at the short term future, now it’s true some (not all) but some potential purchasers of property in Clapham may be exhibiting more caution because of concerns that the Bank of England will continue to put up interest rates– to which I reply – yes of course they will when they are only ultra-low at 0.75%. Anyway, that is the reason why 90%+ of new mortgages over the last nine months have been on a fixed rate. Also, if they do go up a few percentage points – they are nothing compared to the 12%, 14%, even 15% mortgage rates many of my landlords saw in the early 1990’s.

We can all speculate (and I appreciate the irony of that as I write this article) but all I say to any Clapham landlords, Clapham homeowners or Clapham first time buyers is act according to your own life cycle, budget on a modest increase in interest rates in the coming few years (yet protect yourself by fixing it), consider your own circumstances and finally, what you can afford.

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Value of Clapham Property Market falls £29.4m

The combined value of Clapham’s housing market has fallen by £29,400,762 in the last 6 months, meaning the average value of a Clapham property has decreased in value by an average of £7,222.

This is great news for Clapham first time buyers and Clapham buy to let landlords, as there is a slight hesitation in the market because of the uncertainty over Brexit. As I have always said, investing in Clapham property, be it for you to live in or as a buy to let investment, is a long-term game. In the grand scheme of things, this minor change over the last 5 or 10 years is nothing.

The RICS’s latest survey of its Chartered Surveyor members showed that nationally the number of properties actually selling has dropped for the 16th month in a row. Locally in Clapham, certain sectors of the market are matching that trend, yet others aren’t. It really depends which price band and type of property you are looking for, as to whether it’s a buyers or sellers market.

The RICS also said its member’s lettings data showed a lower number of rental properties coming on to the market. Anecdotal evidence suggests that (and this is born out in the recent English Housing Survey figures) Clapham tenants over the last few years are stopping in their rental properties longer, meaning less are coming onto the market for rent. I have noticed locally, that where the landlord has gone the extra mile in terms of decoration and standard of finish, this has certainly helped push rents up (although those properties where the landlord has been remiss with improvements and standard of finish are in fact seeing rents drop). Clapham tenants are getting pickier – but will pay top dollar for quality. So much so, I believe there will be a cumulative rise of around fourteen to sixteen per cent over the course of the next five years in private rents for the best properties on the market.

Back to the Clapham Property Values though …

This slight drop in Clapham property values doesn’t particularly concern me. The fact is that over the last 6 months 283 properties have sold for a combined value of £227,423,328. You see, that drop must be seen in perspective in that 6 months ago, the total value of Clapham property stood at £3,494,823,228 (£3.49bn), and today it stands at £3,465,422,466 (£3.47bn) .. this change is a drop in the ocean.

In the short term, say over the next six months and assuming nothing silly happens in Korea, the Middle East or Brexit negotiations, it will be more of the same until the end of the year. In the meantime, the on-going challenges ensuring we as a Country build more homes (although the Office of National Statistics figures released in July showed nationally the number of new homes started to be built over the second Quarter of 2018 had dropped dramatically) makes me think that Clapham (and Nationally) property value is likely to recommence an upward trajectory as we go into 2019.

One final thought for all the buy to let landlords in Clapham (and indirectly this does affect all you Clapham homeowners too). I do hope the recent tax changes towards buy to let landlords don’t bite as deep as it is possibly starting to with certain landlords I know. We talked about this in an article a few weeks ago and I know why the Government wanted to change the balance by taxing landlords and providing a lift for first time buyers .. however, this may well come at the expense of higher rents for those Clapham tenants that don’t become first time buyers, as the appeal of buy to let potentially weakens.

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Clapham Property Market – How Does It Compare Historically to the Greater London and National Property Market’s?

Living in our own homes or owning buy to let property in Clapham and the surrounding areas, it’s often easy to ignore the regional and national picture when it comes to property. As a homeowner or landlord in Clapham, consideration must be given to these markets, as directly and indirectly, they do have a bearing on us in Clapham.

Locally, the value of property in Clapham and the number of people moving remain largely steady overall, although looking across at the different regions, there are certainly regional variations. Talking to fellow property professionals in the posh upmarket central London areas of Mayfair and Kensington, the number of people looking to buy and registering interest with agents is continuing to climb after 18 months in the doldrums, whilst in other parts of the UK, there is restraint amongst both buyers and sellers in some locations.

The things that affect the national property market are the big economic numbers. Nationally, over the last few months, thankfully, the economic forecast and predictions have improved, notwithstanding the Brexit uncertainties. Inflation has mercifully throttled back its high growth seen in 2016 to the current level of 2.1% (from 2.7% average last year), coupled with marginally stronger wage growth at 2.5%. Unemployment is at a 42-year low at 4.2% and UK consumer spending power rose to an all-time high last month to £331.04bn – all positives for consumer sentiment.

Look further afield, a resilient property market depends on the UK's economic health with the outside world, so if Sterling weakens, that makes imports more expensive, meaning inflation increases, and this matter I talked about a few weeks ago in my blog article ... interest rates could be raised to bring inflation under control, which in turn could seriously affect the property market. On the assumption Brexit negotiations are successful, economic growth should continue to be upward and positive, meaning confidence would be increased ... which is the vital element to a good housing market.

Looking closer to home now, Clapham landlords and Clapham homeowners might be interested in the how the regional and Clapham markets have performed over the last 20 years (compared to the National picture). Let’s look at the regional picture first,

Lambeth has outperformed the Greater London housing market by 7.39%...

...and nationally, Lambeth has outperformed the country by 55.12%

That means a Clapham homeowner has profited by an additional £469,226 over the last 20 years compared to the average homeowners across the country.

I found it interesting to see the ups and downs of the Clapham, Greater London and National markets in this graph. How the lines of graphs roughly go in the same direction, with Clapham following the regional trend more closely than the national trend (as one would expect), how the 2007/08 property crash timings and effects were slightly different between the three lines and finally how the property markets performed in the post-crash years of 2011 to 2014 ... fascinating!

So, what does this all mean for Clapham homeowners and Clapham landlords?

Well, house prices going up or down are only an issue when you sell or buy. In the last 12 months, only 1,076,288 (let’s call it’s a straight million between friends!) properties changed hands out of 27.2 million households in the UK in 2017, meaning only 3.7% would have been affected if property values had dropped in the last year.

Property values in Clapham are 431.41% higher than the summer of 1998

Yet this has been a long-term gain. The number one lesson in property is that it is a long-term game. The biggest issue in property isn’t house values or prices ... it’s the number of homes built, because the number of households nationally has only increased by 6% since 2007, whilst the population has grown by 7.6%. That doesn’t sound a lot, until you express it another way…

If the UK population had had only grown by the same percentage as the percentage growth in UK households in the last decade, there would be 1,000,000 less people living in the UK today

The final thought for this article is this, apart from central London, over the last 20 years it hasn’t mattered what part of the UK you were in with regards to the property market. Be you a landlord or homeowner, property is a long game, so look long term and you will win because until they start to build more homes, from the current levels of 180,000 new homes built per year to at least 250,000 households built per year, demand will, over the long term, outstrip supply for owning and renting!

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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 Clapham home owner, who has remortgaged to raise money for other projects (meaning you have very little equity), you will want Clapham property values to rise to enable you to put a bigger deposit down on the next purchase.

So, before I discuss my thoughts on the future, it’s important to look at the past…

The last property crash, caused by the Global Financial Crisis, was between Q3 2007 and Q3 2009 … when property values in Lambeth dropped 13.09%

...taking an average property from £318,371 in September 2007 to £276,691 by September 2009 … and since then – property values have over the medium-term risen (as can be seen on the graph).

So ... what is happening now?

The simple fact is people in the UK are moving less (and hence buying and selling less). Estate agents up and down the land are blaming “Brexit” for this but the reality is that the problems in the British housing market are a lot greater than measly old Brexit!

There is a direct link between how people feel about the property market (sentiment) and the actual performance of the property market. However, the question of whether people’s sentiment moves as a result of changes in the property market, or whether changes in the property market drive sentiment is a question that baffles most economists – you see if someone feels assured about their financial situation (job, money etc.) and the future of property, they are more likely to feel assured to spend their hard-earned earnings on property and buy and if you think about it … vice versa. So, I believe Brexit isn’t the issue - it’s just the “go to” excuse people are using. Humans don’t like uncertainty, and Brexit itself is causing uncertainty – it is, after all, the great unknown.

So, is it the flux of global politics? Politics are causing hesitation in the posh £5m+ markets of Mayfair and other high value Monopoly board pieces – but certainly not in sleepy old Clapham (I don’t think Clapham is too high up on the house buying list of all these Saudi Prince’s and Russian Oligarchs) ... no the issues are much closer to home.

So, coming back to reality, one the biggest driving factors in the current state of play in housing market has been the part Buy To let landlords have played in the last 15 years. Making money as buy to let landlord in these golden years was as easy as falling off a log – but not anymore! Landlords had been getting off quite lightly when it came to their tax position, but with Osborne changing the taxation rules on buy to let ... things have become a little more difficult for landlords.

Landlords have been hit with a supplementary rate of stamp duty, meaning they pay 3% more stamp duty than first time buyers. High rate taxpayers in the past have been able to offset the interest payments from their buy to let mortgages against their self-assessment tax bills – at their marginal rate. Between now and 2020 ... this is being reduced in small steps, so they will only be able to claim back relief at the basic rate of tax. The bottom line is that it will be much tougher for investors to make money on buy to let. Tied in with this, the mortgage rules were changed a few years ago, meaning it’s also become slightly tougher to obtain buy to let mortgages (although if I’m being honest – they need too).

...and what of Clapham first time buyers? Well, a few weeks ago in my blog on the Clapham Property Market, if you recall, I mentioned that last year was the best year for over decade for first time buyers. For the last 30 years, buy to let investors have constantly had more purchasing power than first time buyers, as they were older and more established, together with their tax breaks. Yet, now as many amateur landlords are having second thoughts in staying in buy to let, this has given first time buyers a chance to get on to the property ladder.

What will happen to Clapham property values? The simple fact is we don’t have the conditions that caused the crash in 2007 (i.e. sub-prime lending in the US, causing banks not to lend to each other, thus stalling the global economy as a whole). Assuming everyone is sensible on the Brexit negotiations, the biggest issue is interest rates. As long as interest rates remain comparatively low (and don’t get me wrong – I think we could stand Bank of England base interest rates at 1.5% to 2.5% and still be OK, then the thought of a massive property market crash still looks improbable.

Yet correspondingly, I cannot see Clapham property values rising quickly either.

The double-digit growth years in property values between 1999 and 2004 are well gone. A lot of that growth was caused by an explosion of buy to let landlords buying property to accommodate the influx of EU migrants in those years. Mark Carney at the Bank of England can’t make interest rates any lower, so it’s difficult to envisage how credit conditions can get any easier!

Balance of probabilities ... Clapham property values will hover either side of inflation over the next five years, but if we did have another crash, what exactly would that mean to Clapham homeowners - if they dropped by the same percentage amount, as they did in the last crash?

If Clapham property prices dropped today by the same percentage as they did locally in the Global Financial Crisis back in 2007/9 … we would only be returning to the property values being achieved in April 2015 … and nobody was complaining about those!

Therefore, looking at the number of people who have bought homes in the area since April 2015, that would affect approximately only 17% of local home owners and landlords ... and only a small percentage would actually lose - because you only lose money if they decide to move (and come to think of it, some of those sellers would fall into the category mentioned above that would relish a price drop!). So, really not many people would lose out.

Interesting don’t you think?

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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 downsizers (as was done for first time buyers last year), together with encouraging even more first-time buyers with 100% mortgages to buy the smaller properties, this would in turn release more mid-range properties onto the market, which subsequently would encourage more mature homeowners to downsize from their bigger properties to buy those mid-range properties - thus completing the circle.

Looking at the most recent set of data from the Land Registry for Clapham (the SW4 postcode in particular), the figures show the indifferent nature of the current Clapham property market.

Only 236 Clapham (SW4) Homes changed hands in the last 6 months

Clapham property values and transactions continue to be sluggish, and the monthly peaks and troughs of house prices and properties changing hands doesn’t mask the deficiency of suitable realistically priced property coming onto the Clapham property market, meaning the housing market is slowly becoming inaccessible to some would-be home owners.

Looking at what each property type is selling for in SW4 (note the data from the Land Registry is always 4/5 months behind) makes interesting reading …

One must remember these are the average prices paid, so it only takes a run of a few expensive or cheaper property types (as can be seen with the variance in the Terraced and Semi Detached in the table) to affect the figures..

Looking at the numbers of properties for sale … I looked at my research for early Summer 2008, and at that time, 1,762 properties were on the market for sale in Clapham.. and when I did my research on this article today, just 969 properties for sale.. a drop of 45%.

The Government needs to seriously consider the supply and demand of the UK property market as a whole to ensure it doesn’t seize up. It needs to do that with bold and forward-thinking plans but, in the meantime, people still need a roof over their head, so as local authorities don’t have the cash to build new houses anymore, it’s the job of Clapham landlords to take up the slack. I must stress though, I have noticed a distinct ‘flight to quality’ by Clapham tenants, who are prepared to pay top dollar for an exceptional home to rent. If you want to know what tenants are looking for and what type of things you as a Clapham landlord need to do to maximise your rental returns – drop me a line.

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Clapham Property Values 0.2% higher than year ago – What’s the PLAN to fix the Clapham Property Market?

It’s been nearly 18 months since Sajid Javid, the Tory Government’s Housing Minister published the White Paper “Fixing the Broken UK Housing Market”, meanwhile Clapham property values continue to rise at 0.2% (year on year for the council area) and the number of new homes being constructed locally bumps along at a snail’s pace, creating a potential perfect storm for those looking to buy and sell.

The White Paper is important for the UK and Clapham people, as it will ensure we have long-term stability and longevity in property market as whole. Clapham home-owners and Clapham landlords need to be aware of these issues in the report to ensure they don’t lose out and ensure the local housing market is fit for purpose. The White Paper wanted more homes to be built in the next couple of decades, so it might seem counter-intuitive for existing home-owners and landlords to encourage more homes to be built and a change in the direction of housing provision – as this would appear to have a negative effect on their own property.

Yet the country needs a diversified and fluid property market to allow the economy as whole to grow and flourish ... which in turn will be a greater influence on whether prices go up or down in the long term. I am sure every homeowner or landlord in Clapham doesn’t want another housing crisis like we had in 1974, 1988 and most recently in 2008.

Now, as Sajid Javid has moved on to the Home Secretary role, the 17th Housing Minister in 20 years (poisoned chalice or journeyman’s cabinet post) James Brokenshire has been given the task of making this White Paper come alive. The White Paper had a well-defined notion of what the issues were.

The first of the four points brought up was to give local authorities powers to speed up house building and ensure developers complete new homes on time. Secondly, statutory methods demanding local authorities and builders build at higher densities (i.e. more houses per hectare) where appropriate. The other two points were incentives for smaller builders to take a larger share of the new homes market and help for people renting.

However, lets go back to the two initial points of planning and density.

(1) Planning

For planning to work, we need a robust Planning Dept. Looking at data from the Local Government’s Association, in Lambeth, the council is below the regional average, only spending £39.53 per person for the Planning Authority, compared the regional average of £45.52 per head – which will mean the planning department will be hard pressed to meet those targets.

However, 90% of planning applications are decided within the statutory 8-week initial period, above the regional average of 85% (see the graph below). I am slightly disappointed and also pleased with the numbers for our local authority when it comes to the planning and the budget allowed by our Politician to this vital service.

(2) Density of Population

113 people live in every hectare (or 2.471 acres) in Lambeth

It won’t surprise you that there are 303,086 Lambeth residents living in the urban conurbations of the authority, giving a density of 113 people per hectare (much lower than I initially thought).

I would agree with the Governments’ ambition to make more efficient use of land and avoid building homes at low densities where there is a shortage of land for meeting identified housing needs, ensuring that the density and form of development reflect the character, accessibility and infrastructure.

It’s all very good building lots of houses – but we need the infrastructure to go with it.

Talking to a lot of Clapham people, their biggest fear of all this building is a lack of infrastructure for those extra houses (the extra roads, doctors surgeries, schools etc.). I know most Clapham homeowners and landlords want more houses to be built to house their family and friends ... but irrespective of the density ... it’s the infrastructure that goes with the housing that is just as important ... and this is where I think the White Paper failed to go as far as I feel it should have done.

Interesting times ahead I believe!

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