6.8% rental yield in Clapham South

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

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

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

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

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

How will stamp duty reform affect the Clapham property market?

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

From today, this means:

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

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

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

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

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

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

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

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

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

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

Auction: 5 bed between Clapham and Wandsworth Commons

This five bedroom terraced house in Mayford Road SW12 is available via Barnard Marcus Auctions and goes under the hammer on 16th December.

http://www.rightmove.co.uk/property-for-sale/property-49351424.html

The property appears to be in reasonable condition - an empty shell ready to be turned into the superb family home that the location warrants. Mayford Road is very highly regarded and is just a stone's throw from Wandsworth Common Station (for London Victoria) and easy walking distance from Balham Station for the Northern Line. 

With a guide price of £900,000, it's a potentially lucrative investment opportunity. In February 2014, a five bedroom terraced house in Mayford Road, finished to an extremely high standard throughout, sold for £1,795,000, while another comparable four bedroom property is currently on the market with an asking price of £1,650,000.

Viewings with Barnard Marcus Auctions are scheduled for 1.30pm on the following dates:

Friday 5th December

Tuesday 9th December

Thursday 11th December

Monday 15th December

If you're a developer or buy-to-let landlord who's spotted a potential investment opportunity, why not ask my opinion with no obligation? Give me a call on 020 3397 2099 or email me at jeroen@xandermatthew.com.