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THE MARKET - temporary suspended -
THE MARKET - 29 May 2007 - IS IT R.I.P. FOR H.I.P - another delay or the final death call for this ill thought out idea? Now "postponed" until 1st August and then only for 4 bed properties is the latest announcement from the Government that his totally failed to understand the housing market from day one and continues to meddle in a market it would be best to leave alone. The discussion is now what is aa 4 bed property as there is apparently no legal definition. However, before we all start thinking it is finally over - one item that will remain is the Eco report as this is required by EU regulations!! No date for when these will be compulsory but it will be sometime before 2021!!
At last the Buy to Let lenders are coming out with some realistic figures about the actual market. Prompt no doubt by the suggestions of a 6% base rate by the end of the year. RBS has altered its B to L lending criteria. RBS will accept 100% rental cover of the mortgage but only if the borrowers household income is above 75,000. Those earning 35k to 75k will need cover of 110% and anyone with less than 35k will need at least 125%. RBS clearly believes that those will a higher salary will have the reserves to fund the shortfall between mortgage and rent.
The FSA is clearly becoming concerned reporting that 8% of properties sold at auction in Feb 2006 were repossessed. In December 2006 this had risen to 25% with 80% of them situated in postcode areas dominated by buy to let properties.
Paragon are now offering a new deal for existing b to l investors with a deposit of only 15% - they quote a rental cover of 110%. An established landlord borrowing 85k on a 100k property would have interest payments of 425 so they need a rental income of 467.50. However, a new landlord would need a rental of 531. With their estimated yields of 6.1% the expected rent would be 432 - or 99 less than is needed. The one question they do not answer is where can you buy a 100k property that will let for 500 a month!
What this space and the bank rate!!
THE MARKET - 8 May 2007 - BUY TO LET - has the BOOM bust!!??
In 1996 you could buy a one bedroom flat in the Borough of Hounslow for £60,000 taking out a 75% interest only mortgage would cost £250 a month and the rental value, after agents fees, would be around £560 - in fact you could take out a repayment mortgage for £405 per month.
In 2000 you could buy the same property for £120,000 with a interest only mortgage cost of £506 rent for £590.
In 2004 it would cost £160,000 to buy, mortgage £500 and rent at £610.
In December 2006 you could buy for £190,000, mortgage £708 per month and rental after fees of £720 per month.
Whereas from 1996 to 2006 you culd expect the rent to cover the expenses of the property and give a reasonable profit from capital growth the picture is now changing. The Association of Residential Letting Agents claim that since the third quarter of 2006 anyone on a 75% interest only mortgage has been loosing money. The typical buy to let investor needs the capital market to increase by at least 2% just to break even this year. This will be possible in Central London and a few "hot spots" (remember this years hot spots are next years cold spots) but generally with the signs of further interest rate increases and the average house now being 7 times the average earnings - most commentators are forecasting a slow down in the market and prices and some suggesting that outside London their could be substantial falls.
Add to the figures the fact that in many areas the buy to let market is oversupplied - in 1996 there were 30,000 b to l mortgages in 2006 there are 850,000 - investor must keep rents attractive to avoid long void periods.
so has the BOOM - BUST -
Actual figures from a 2 bed new build in Hounslow - Advertised Rent quoted.
Purchase including fees: £305,000
Advertised Rent: 1,050 pcm
Mortgage offered against rent* £175,000
*5.8% fixed 2 years - 125% of rent.
Balance from other resources £130,000
After allowing for mortgage (interest only) repayment, agents fees, etc but no voids - profit on monthly rental £2.72 pcm
Current expectation of Capital growth 3% = £725 pcm
(£290,000 @ 3%)
Total monthly profit including capital growth £728 pcm.
(decreases by £248 pcm after 2 years when mortgage reverts to the current rate - currently 7.4%)
£130,000 capital invested as a cash deposit = £628 pcm internet bank
(increases by £27 per month for each 0.25% increase in base rate)
Maybe it is time to judge the market and realise the capital growth - high demand and low supply as resulted in a huge increase in the price of one bedroom properties on Brentford Dock - with prices achieved this week in excess of £205,000. Two bedrooms in good order appear to have broken through the £250,000 at £265,000 - three bedrooms remain around the £280,000 - £320,000 market depending on position and condition.
Maisonettes by the river show good returns on last year up from £395,000 to £450,000.
Is your house still your home - or a pension plan!
THE MARKET - February 2007 -26 - The spread of Government Regulation takes another step forward as from 1st April 2007. As from the 1st April all buy to let landlords are required to join a government sponsored tenancy deposit protetion scheme. There are two types of scheme: custodial, under which the landlord must hand over deposits to the scheme operator, and insurance based, which allows the landlord or their agent to retain the deposit monies. Any landlor taking a deposit which they do not protect by joining a scheme will be breaking the law. they will be unable to regain possession of the property using notice-only grounds for possession and will be liable to pay the tenant 3 times the value of the deposit. The National Landlords Association is running a scheme details of which can be found on www.mydeposits.co.uk.
A new timetable for the Home Information Pack (HIP) has also been announced - all properties advertised for sale after 1st June will be required to have a HIP - however for properties already on the market at 1st June they will not need to have a HIP until November 2007. The National Association of Mortgage Lenders has asked the government to delay the introduction of the scheme for a further period to allow the trial areas to report.
THE MARKET - February 2007 - a shortage of properties being offered for sale appears to be resulting in a lively market with increasing prices - one bedroom on The Dock having moved from around the £185k before Christmas to offers in excess of £190k in February. The interest rate rise does not appear to have reduced the number of buyers trying to get into the market. We are seeing an increase in sales from investor clients who are now taking the capital appreciation of the last 5-10 years - preparing the the downward adjustment of the market that will undoubtedly follow further bank rate increases.
THE MARKET - January 2007- The New Year as usual brings a raft of facts, figures and predications regarding the economy and in particular the Housing Market. According to Rightmove the average asking price of a property in London has risen by 23%. Hometrack says prices have climbed 5% nationally and more like 12% in London. In the North prices have fallen 2.7% in a month but are still 5% higher than in 2006. YouGov reports that 19% of adults expect a price crash in the next twelve months.
In you want the facts about prices in your area then go to www.ourproperty.co.uk a free website that reports actual prices as recorded by the Land Registry.
The market is very patchy and the old adage of doing your homework on area and previous market trends holds good.
In the London Market Hackney showed an increase of 20.34%; Islington 19.64% Kensington & Chelsea 19.55% whereas Greenwich was up 4.23% Hillingdon 4.66%; Harrow 4.67%. The Hounslow area is difficult to estimate due to so many new developments but we estimate an increase borough wide of around 4%. Prices in Chiswick would appear to have peaked, Feltham is riding on a wave of new build, the new town centre development in Hounslow is selling well. Brentford has yet another massive development announced on the old Smith Kline site by Barratts with 800 new homes, new retail, restaurants and offices, plus a hotel. A further hotel is also planned within the Syon Park complex.
Rental prices are showing little signs of increasing despite first time buyers now being unable to enter the sales market. Current average house prices are 8 times the average earnings, and even with some help from parents a first time buyer with a 20% deposit will still require 6 times earnings to finance a purchase. Hardly surprising then that Abbey (always on the look out for a new opportunity) has introduced mortgages at 5 times joint earnings.
One national newspaper even suggested that the influx of workers from the EU would push up the rental market. I am not too sure that a responsible managing agent would rent out to a person who has no track record of employment, no permanent UK address, no UK references and can only offer a copy of a passport as security.
Other advise suggests that now is the time to get out of the UK buy to let and invest abroad - Turkey being the hot spot (ok I suppose as long as the Pope doesn't make another speech) or maybe Bulgaria (nice stable economy!). Seriously with low rental returns maybe now is the time to consider any investment portfolio.
The general view from the "experts" says that the average price increase in 2007 will be 5% - this will mean that some areas will see falls from current levels. Add in the effect of the Home Information Pack, required from 1st June on all sales at an extra cost to the vendor of at least £700; the Gordon Brown factor; more confidence in the Stock Market; likely 1% bank rate rise over the year - and the market could look totally different this time next year.
Perhaps it is time that we got back to the idea that a House is something to turn into a Home and not a financial get rich quick 4 by 4. A simple fact of life and mathematics is that the price of assets cannot keep rising faster than our ability to pay for them. The average house price in England and Wales is nearly £200,000 the average salary £24,300 (Office Nat. Stats) that is a gearing of 8 times. At some point, and we believe in the not too distant future, the ability to purchase will control the price asked. PriceWaterhouseCoopers says that there is a 50-50 chance that house prices will be lower in real terms by 2010 - that will require a considerable adjustment to the market - someone somewhere is going to have to bite the bullet - it won't by the financial institutions because even in a repossession situation (and those are up by over 20% this year) they will still get there 80% back.
So for 2007 we suggest a serious review of portfolios, no gearing above 60% for investment purposes and don't be tempt by the grass is greener on the other side of the water - unless that water is the Atlantic and then with the £1 almost worth $2 and the USA market in free fall maybe a punt in LA. or Florida is worth a look.
Happy New Year !!
THE MARKET - November 2006 - travels in the USA and Europe have delayed our more regular market report. The US housing market is now in free fall with an oversupplied market and realtors getting ready to jump of the high rises!!
The UK base rate increase will no doubt slow the market but the shortage of properties is still leading to an average market increase of 7%. Buy to Let continues to be oversupplied and the governments schemes for key workers are at long last being seen as the failure they always were.
Feltham is the real hot spot in West London - with potential for good rental returns as Terminal 5 nears completion.
In Brentford a shortage particularly of one bedroom properties is pushing prices up with little available below £180,000.
Rental values have yet to reflect the increase in prices and yields continue to be low.
The big question is has the market now reached the top of the cycle - forecasts are for the north south divide to open up - it may be too soon to take a balanced view and the south will be further confused when the big city bonus hit the streets -there is apparently a shortage of £2M+ homes in London!
THE MARKET - August 2006. Interest rate up 0.25% Fears of slowing the market down do not appear to have hit the big London spenders - according to latest Land Registry figures the market is buzzing with central london agents selling £1M plus homes at the rate of 14 per day!! Known in the trade as the Chelsea effect based on high earners in a certain "industry".
Outside London some previously slow areas appear to be catching up with increases of 27% since the last quarter reported in the North East - the average house price for the UK show an increase of 7.7 p.c. Not all areas have increased with Milton Keynes, Thurrock and Swindon falling 2 p.c. in the past year. Chief Economist for the R.I.C.S. claims that the housing market is in a firm state and well placed to shrug off the lastest increase in base rate. However the National Association of Estate Agents reports that first time buyers are done to 12.5% in June well below the expected norm of 25%. It claims that the number of buyers registered with agents has fallen and more properties are on the market than at any other time in 2006.
Key Workers continue to be frozen out of the property ownership ladder, despite a new raft of measures introduced by central government. (Once again badly thought out and needing a strong nerve and belief in a continuing rise in the markets to make them a good deal). The Halifax claims that in 339 towns of 519 examined key workers cannot afford to buy.
The "Olympic Boom" widely talked about by the press and agents twelve months ago has (as we predicted) - in fact come to nothing. According to land registry figures now issued show increases of 14.3% in the first quarter of 2006 compared to 2005 - but this is based on only 32 sales - against 113 sales reported in the first quarter of 2003. Looks like the spin doctors of the housing market sold a good story that does not have a happy ending. Close examination of the Land Registry returns shows properties bought in Stratford in Nov 2004 for £250,000 sold for £250,000 in March 2006. Bought for £230,000 in June 2005 sold for £240,000 in Feb 2006 - barely covering the legal and agents fees.
Over the pond in the US facing high government deficits the market is really going bust - One builder reporting a 43% cancellation and the average house prices have falled for $244,000 (£134,065) to $236,000 since April £129,670 (based on 1.82 dollar). With the dollar now trading at 1.90 to the £ - maybe it is the time to look over the pond. Anyone interest in the West Coast LA or San Francisco please contact us as we maintain associate contacts in both cities. Our next visit for clients being 5/12 September 2006. With a work force of over 500,000 in California alone estate agents are desperate to talk to clients!!
Nearer to home the Reflexion development in Central Hounslow is worth a visit with genuine two double bedroom apartments selling around the £280,000 - one draw back is that the commercial development on the adjacent site could have a 2 year build programme. Feltham Town Centre is nearing completion and could represent some investment potential for right to buy clients being on good transport links and close to the new Terminal 5.
THE MARKET - July 2006 - Travelling abroad and a busy conference season has somewhat limited our Market Reports over the past few months. However, both the sales and rental market appear to be firming. Both due to a shortage of supply. In general house prices in the South appear to be rising in the region of 5% on the year - creating a wider gap with the North where the market appears to have slowed - all areas of the country appear to be short of stock.
We are undertaking more sales strictly private where we source properties for purchasers - we currently have clients who may be interested in disposing of 4 bed riverside maisonettes on Brentford Dock at prices in the region of 450,000 to 500,000 - which are very competitive prices considering similared size townhouses with canal views are selling on the Lock at 650,000+
The rental market is at long last improving and we are seeing one bedroom rentals unfurnished reaching the 800 mark and two bedrooms coming onto the market at near or above 1000 depending in condition and views. Net net returns however remain at around the rate you can get from a good internet deposit account - so our old advice if you buy to let be in it for the long term still holds good.
THE MARKET 30 January 2006 - The cost of selling your home will rise by £700-£1000 as from June 2007 thanks to a new government iniative the Home Information Pack - for details see www.hipfreehomes.co.uk and for the official view see www. odpm.gov.uk
The Centre of Economics and Business Research forecasts that house prices will rise on average by 4.4% this year, largely in the first half before the market stagnates in the Autumn. Fears of of a slowdown, in the overheated, US market in 2007 may continue the stagnation in the UK market through 2007.
Barratt Homes report that it built over 7000 homes in the second half of 2005, owner-occupier prices rose by 1%. The number of properties built for social housing rose by 14%. Barratt hold a land bank equivalent to 63,000 new homes.
THE MARKET 24 JANUARY 2006 - It has been some time since our last market report due to a combination of extended overseas travel and some issues from third parties on the views expresses in our previous reports. Hopefully we are now back of course for regular updates.
The doom and gloom merchants of 2004/05 have finally admitted that we are not into a deep housing depression and that prices will rise during the year between 2 and 5%. Again we feel that these rises will be very localised and influenced by local factors. In West London we forecast a stable market with a shortage of properties currently resulting in sales at close to asking prices, which are also pitched at more realistic levels.
The various government iniatives are having little effect on the overall market. The big hitter is the reversal of the indication that residential properties could form part of the SIPPS scheme. Several investors who jumped the gun and entered into new buy contracts to complete after 5 April 2006 are now facing serious problems off loading the properties. This is having an adverse effect on the East London market, despite the over hyped effect of the Olympic developments.
Several building societies have now withdrawn completely from the buy to let market and others are revising loan levels following concerns over the accuracy of surveyors valuations of property and rental levels that can be achieved. Our advise is research the area fully before committing and do not take the advice of the on site agent (either sales or letting) as the gospel truth. To check out accurate recent sales in an area go to www.ourproperty.co.uk - its a free service and give actual land registry prices.
THE MARKET 10 September 2005:
The local rental market continues to be oversupplied and prices falling - the local free newspaper Informer carried 58 pages of property adverts of which 20 were properties to let!
The normal cycle of a weak sales market bringing on a strong rental market does not seem to be operating. HBOS reports this week that its Halifax offshoot is showing a 1.6% ris in July which is a 2.5% rise in the market in the last 12 months. There is little sign of rising prices in the local market and buyers have lots of choice and time.
THE MARKET 9 August 2005
An extended trip to the US and catching up resulted in no market report in July - not that there was much market activity to report.
Base rate is down 0.25% and the FTSE seems to have stablised at something over 5200 - some "experts" suggest that there is some upward movement in the market but this area of West London is definately a stand on position with sellers giving discounts for no chain and quick completions. The rental market continues to be oversupplied and stories are emerging of repossessions on some new developments where investors were ill advised on the gearing to take on and the rentals achieveable.
The Deputy Prime Ministers requirement to build homes for £60,000 reached is stage one conclusion with winning designs announced - full details can been seen on www.designformanufacture.info - not that any developer seems to be suggesting that these homes will enter the normal commercial market.
Interesting facts from the "Survey of English Housing 2003-04" released recently show that there in 2003/04 there were 14.5M homeowners in England; that is 71% of all households, 5.5M were first time buyers and whom 1.1 M were former sitting tenants who had purchased their homes through the Right to Buy or similar schemes. Thats 1.1M less home available for affordable rents that would enable tenants to save for a deposit and enter the private market through the normal mortgage route - instead the government (all parties support the plan) give them a discount of upto £30,000 to stay put and take one more unit away from social housing. 59% of owners are buying with a mortgage, 41% own their home outright of whom 12% had never needed to raise a mortgage.
Between 1993 and 2004 the percentage of households with interest only mortgages fell from 67% to 31%.
It is estimated that 298,000 households in England had a second home compared to 256,000 in 2002/03
The winning of the 2012 Olympic bid presents a new opportunity for hype from agents in East London with outrageous claims of capital growth and rental opportunities as a result of winning the bid - presumably they have a collection of tenants who want to live in a building site for the next 10 years!
September should hopefully present a more balanced market !
THE MARKET 9 June 2005
The Bank has held the base rate @ 4.75% although there was some expectation of a slight cut. The FTSE100 is below 5000 again having hovered around this mark for some time. Most agency are now predicting a slow and soft stagnation of the housing market with a national increase of just 0.3% in May. Fionnuala Earley, Nationwide Chief Economist said "It was now unlkely that house prices would fall steeply - There are some cloomy views about the market. Our view is that the market is underpinned by the relatively strong economic background".
The recent government announcement to assist buyers with part purchase in the housing market looks like a dead duck before it even starts - more support from the government for affordable rented homes would help people to save for the deposit and enter the market in the normal way. The growth of Housing Associations with shared ownership schemes which in the end cost more than conventional mortgates has done more harm to the market than good and in the long term will lead to real social problems to people who have not worked out the full cost of home ownership.
It is without doubt a buyers market, on Brentford Dock we have sellers willing to talk discounts on both one, two and three bedroom properties. A recent addition to our listings is a fabulous 4 bedroom riverside maisonette at £420,000 which is amazing value with views directly over the River Thames and into Kew Gardens compared with the "town houses" on Brentford Lock at over £700,000 with views over a divert River Brent and towards the Butts.
THE MARKET 23 May 2005
The election over and the Blair/Brown team back in charge! Keith Hill moves from his Housing Minister post replaced by Yvettee Cooper (husband to Ed Ball former advisor to the Chancellor) - and surprise surprise the first signs of the Treasurer try to restart the first time buyers market with part buy part rent for the private sector - a revamp of their social housing Housing Association scheme that is not the outstanding success it's claimed to be. We have to wait for more details and the scheme is not due to lift off till April 2006 - so no hope of an impact this year!!
Interest rates look set to stay at 4.75 and some experts saying they have reached the top and a 5%+ rate is not expected as previously predicted.
The sales market is slow but prices nationally are still rising! The Land Registry reports that prices were 10.27% up for the first 3 months of 2005 - one quarter of the sales being cash sales.
We have several properties at Brentford Dock on which the owners are prepared to talk substantial discounts for speady completions. Call us on 07970 143 980 for further information.
THE MARKET April 2005
With the election declared and "the" wedding over - we can return to the important conversation of what will happen to the market. Interest rates on no change and some movement on stamp duty (that will not effect anything south of Watford) seems to indicate a continuing stagnation on prices. However there are the early signs of a return to a slow rise, sellers are still offering good deals and now may be the time for buyers to seriously start looking. The Buy to Let market continues to be oversupplied in the West London area with 2 bed particularly on the new developments. Buy off plan and sell before completion is very much not for the faint hearted - indeed it may only be for the foolish.
Brentfords new Holiday Inn with conference facility for 500 delegates is due to open late Summer 2005 and brings the first fully operational conference hotel to Brentford. The outline plans for Commerce Road along the banks of the Grand Union Canal suggests more retail, some work live units and upto 900 more apartments - Brentford is now the hot spot in West London.
If the Community Groups would just accept that water based industry is not going to return to Brentford, if anywhere and most of us don't want to live in a museum these developments could forge ahead. Looking at some of the new developments of recent years particularly Ferry Quays it is a pity that these groups don't concentrate on getting some buildings off architectural merit built instead of the constant same designs pushed out by developers for every water site in the country.
Brentford Lock fits well with the skyscape of Brentford with its pitched roofs mirroring the spire of St Paul's as it backdrop, but the Island design can be seen in Bristol, Gloucester and countless other sites and does not reflect its current location facing the Butts.
THE MARKET - February 2005
Two months into the New Year and the FTSE finally rose above 5000 hitting 5050 At one point, sadly (!) it has fallen back in the last two days to below 4990 - well no one should be surprised an historical look at the market suggests a rise in January followed by an adjustment in February. The dollar weakness continues. House prices are stagnant and the rental market whilst seeing more activity in the last few weeks is still suffering from oversupply. Most of the new developments in Brentford have large numbers of 2 bedrooms standing empty - and presumably owners who believed rental value of £1300 per month struggling to pay the mortgage.
So in the current conditions what is the best move? If you have nothing to sell and are ready to buy now is a good time to talk - it is definately a buyers market. If want to move and have to sell to finance your next purchase do your homework on the actual prices achieved in your area. The Land Registry is now releasing actual sales figures achieved - albeit these are two months behind the market they are more reliable than estate agents adverts! For simple comparisons www.ourproperty.co.uk offer a free easy to use service.
Do you own research and dont believe all you read in the papers. Ross Clark, property writer for the Daily Telegraph and nominated for Property Writer of the Year produced this piece of illogical thinking after trawling through property prices and resale prices on an new development in East London. He claims someone made money on the following deal: Flat 418 bought in November 2003 for £435,000 and sold in September 2004 for £450,000 - a price difference of £15,000 looks good UNTIL you take into account Stamp Duty on purchase at £13,000, solicitors fees say £1,000, Service Charge and interest on the mortgage - !! Sounds like someone bailed out to me.
On the social housing front the world gets really crazy - you can buy 40% of a 40 sq metre one bed apartment valued at £190,000 on the Shepherds Bush development that forms part of Ferry Quays (compared with £175,000 for a 48 sq m one bed on Brentford Dock) - your 40% purchase, plus rent of the remaining 60% plus the service charges to two organisations comes to a monthly payment of £932.52! - affordable housing?!
Brentford Dock's in house letting service "Brentford Estates" finally bit the dust this month with a "transfer" of the business to an off site and outside Brentford agent - latest accounts show a trading loss of £8,000+ for the marina berthing and lettings business.
It is not all doom and gloom - we are happy to report an increase in properties under rental and a waiting list of clients for one bedroom properties.
THE MARKET - January 2005
A New Year and the "experts" are out of the woods with the predictions. Is the Stock Market going to outstrip the Property Market - after a Stock Market rally in December it is in danger of falling below 4800 again. Propert guru Kirstie Allsopp of Locaton,Location,Location fame invested £1.7m on three somewhat dilapidated flats in Notting Hill bought at auction in mid December! Gerrards Cross heads the list of most expensive towns with an increase of 36%; Richmond (Surrey) is No2 with a 17% increase; Teddington No9; Kingston No16 and Twickenahm No19 with an 8% increase.
For 2005 the following predictions are being made:
Council of Mortgage Lenders 4%
Institute of Chartered Surveys 3%
Nationwide 2%
Abbey 2%
Hometrack 0%
Halifax -1%
Barclays -8%
Nationwide say "We think the property boom wil conclude with a period of prolonged single-digit growth as earnings catch up with prices .... A sharp downturn in prices cannot be completely ruled out, but while the economic outlook remains positive, it looks unlikely" The Halifax comment "House prices have now been rising for nine years and the average home has gone up by almost £100,000 or 160%. Following such strong gains, homes are no longer affordable for many people. This will contribute to modest price falls this year." On the buy to let investment front Melanie Bien of Savills Private Finance is quoted as saying "The gradual slow down in house-prce growth seen in the past few months looks set to continue, so it is crucial that buy to let investors take a long-term view" (welcome to the club Melanie!!) she predicts "there is likely to be little capital growth in the coming months, property should produce decent growth over the long term. But if you want to buy a property this year to make a quick retrun, you are likely to be disappointed." Historically in a stagnant or uncertain sales market the rental market becomes stronger - lenders are still offering competitive rates on buy to let with Northern Rock at 5.99% for 2, 5, 7 years ; Bristol&West at 5.59% fix for 3 years
LONDON MARKET TO CONTINUE TO GROW -! In 2004 London prices increased by 7.6% (Nationwide) compared with the UK average of 12.6%. Nationwide predict that prices in London will grow by 3% against the UK average of 2%.
OUR VIEW - look at the areas being developed by the big new builders, assess the general area around this years high flyers, remember you are buying a place to live! or for investment purposes keep the gearing below 60%, be realistic with the rent and keep it occupied. Brentford continues to be very active in new build, 2 bedrooms are being oversupplied, one bedrooms are in short supply in the rental market and rental values are slowly increasing. The New Town centre has again hit the papers with the build expected to start this year - thats 2005 ! when it does start expect to see significant increases in prices, particularly on Brentford Dock properties with views over the Grand Union Canal.
Finally it is currently a buyers market - see our sale pages and make us an offer!!
THE MARKET - December 2004
We have now hit the usual stagnation for this time of year - sales are slow and bargains available for first time and no chain buyers. Renters equally can get a bargain on reduced rents for a six month lease. Come January we expect the rental market to take off again as the sales market continues to be difficult. We expect the usual rush of end of year predictions from the "experts" - we await the justification that the stock market (predicted to rise to 5000) would outstrip property investment. The market has yet to break 4800 and house price inflation taking account the recent adjustment in the market is still 10% above the figures at the beginning of 2004.
For Buy to Let investment client we still recommend a gearing of no more than 60% - keep off the new developments that are overpriced and oversupplied - keep renovations simple and relevant with an eye to future maintenance costs. Above all get it let - standing empty costs you money - a rent of £750 per month may look attractive against a rent of £700 a month but if its empty for one month you might as well have let it at £700 as it will take 15 months to get back the £750 you never had!!
Our advice is buy a house to live in or buy to invest for the long term - the days of buy today, fix tomorrow, sell immediately and take the profit are long gone. Very few "developers" made money by refurbishment most of the gain was the natural increase in the market. With increases under 5% for the next year there is no profit in buy and fix.
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