December update Latona Road SE15 - 1 month in!

Well here we are, I'm a month into this lovely rental property. Acquired at a bargain price of course, this will be the pinnacle of my rental portfolio. I'm really looking forward to this one of course, it will be finished to an even higher specification than my previous rental properties, so stand by to be impressed!

This is a 5 bedroom, 1000sqft property that we're adding a shower room to as well as the usual back to brick refurbishment. Watch the video for more!

If you are looking to either invest in one of my projects or perhaps have me source a property for you then do get in touch. if you would like me to email you opportunities DIRECT to your inbox as and when they arise then register here. Now remember I offer a FULL service so from acquisition to refurbishment to dressing, letting and managing. It doesn't get more hands-off than that!

12.54% of Clapham and Lambeth is Concreted over ... Building Plot Dilemma or Not?

Well the fallout from the recent Budget is still continuing. I was chatting to a couple of movers and shakers from the Clapham area the other day, when one said, “There isn’t enough land to build all these 300,000 houses Philip Hammond wants to build each year”.

...and if you read the Daily Mail, you would be forgiven for thinking the Country was at bursting point ... or is it?

It was 60 years ago the first satellite was launched (Sputnik). All the Superpowers have used them to take high definition pictures of each other for decades, but now satellites and their high-powered cameras are being used for more peaceful purposes. The European Environment Agency (EEA) have been taking high definition pictures of the UK from outer-space to give us a focused picture of what every corner of the Country really looks like … and the findings will come as a surprise.

As my blog readers know, I always like to ask the important questions relating to the Clapham property market. If you are a Clapham landlord or Clapham homeowner, this knowledge will enable you to make a more considered opinion on your direction and future in the Clapham property market. Like every aspect of all economic life, it’s all about supply and demand, because over the last twenty or so years, there has been an imbalance in the British (and Clapham) housing market, with demand outstripping supply, meaning the average value of a property in Lambeth has risen by 673.89%, taking an average value from £67,800 in 1995 to £524,700 today.

Using the information from the EEA and data crunched by Sheffield University with their Corine-Land Cover project, I posed them a few questions about the local area, interesting questions I would like to share with you …

1. What proportion of the whole of Lambeth is built on?

95.08%. Now I doubt that came as much of a surprise! In the study, land classified as ‘urban fabric’ defined has land which has between 50% and 100% of the land surface is built on, (meaning up to a half might be gardens or small parks, but the majority is built on).

2. How much land is intensively built on locally?

Of that amount mentioned above, how much of it is high-density urban fabric? (i.e. where 80% to 100% is built on – still leaving 20% for gardens) 12.54% - now maybe that surprised you!

3. So how is the land used locally?

Industry - 0.29%
Sports Facilities - 4.63%

Clapham and the surrounding areas might be greener than you think! In fact, I read that property covers less of the UK than the land revealed when the tide goes out. The assumption that vast bands of our local area have been concreted over doesn't stand up to inspection. However, the effect of housing undoubtedly spreads beyond its actual footprint, in terms of noise, pollution and roads.

Now I am not suggesting for one second we concrete over every inch of the locality, but the bottom line is we, as a country, are growing at a quicker rate than the households we are building. I appreciate the emotional effect of housing is greater than other land use types because most of us spend the vast majority of our time surrounded by it. As Brits, we live our lives driving along roads, walking on footpaths and working and living in buildings meaning we tend, as a result, to considerably overemphasise how much of it there is.

In fact, I was only flying home recently back from a short break abroad, when I looked down and I was reminded just how green Britain actually is!

The bottom line is Clapham people and the local authorities are going to have to put their weight into building more homes for people to live in. There is going to have to be some give and take on both sides, otherwise house prices will continue to rise exponentially in the future and Clapham youngster’s won’t be able to buy their own Clapham home, meaning Clapham rents and demand for private rented accommodation in Clapham can (and will) also grow exponentially.

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

Clapham Property Market and Hammond’s Budget Promise to Build 300,000 more homes

I miss the good old days of George Osborne as Chancellor, with his hardhat and hi-vis jacket. He must have visited every new home building site in the UK with his trademark attire! For the last few years, the nearest Philip Hammond got to donning a ‘Bob the Builder’ outfit was at his grandchild’s birthday party. However, with what appears to be a change in focus by the Tories to ensure they get back in power in 2022, they appear to have fallen in love with house building again with the Chancellor’s promise to create 300,000 new households in a year.

Nationally, the number of new homes created has topped 217,344 in the last year, the highest since the financial crash of 2007/8. Looking closer to home: in total there were 1,135 ‘net additional dwellings’ in the last 12 months in the London Borough of Lambeth Council area, a decrease of 17% on the 2010 figure.

The figures show that 96% of this additional housing was down to new build properties. In total, there were 1,088 new dwellings built over the last year in London Borough of Lambeth. In addition, there were 364 additional dwellings created from converting commercial or office buildings into residential property and a further 71 dwellings were added as a result of converting houses into flats.

While these all added to the total housing stock in the London Borough of Lambeth, there were 388 demolitions to take into account.

I was encouraged to see some of the new households in the Clapham area had come from a change of use. The planning laws were changed a few years back so that, in certain circumstances, owners of properties didn’t need planning permission to change office space in to residential use.

With the scarcity of building land available locally (or the builders being very slow to build on what they have, for fear of flooding the market), it was pleasing to see the number of developers that had reutilised vacant office space into residential homes in the local council area. Converting offices and shops to residential use will be vital in helping to solve the Clapham housing crisis especially, as you can see on the graph, that the level of building has hardly been spectacular over the last seven years!

Now we have had the autumn budget, Theresa May and Philip Hammond have set out their stall with housing as their key focus. I was glad to see the Government introducing a variety of changes to improve housing, including more funding for the supply side and an injection of urgency into the planning system.

The biggest question is, just where are the Government going to build all these new houses? Maybe a topic for a future article?

Back to the main point though and the focus on the housing market by the Tory’s is good news for all homeowners and buy to let landlords, as it will encourage more fluidity in the market in the longer term, sharing the wealth and benefits of homeownership for all. However, in the short term, demand still outstrips supply for homes and that will mean continued upward pressures on rents for tenants.

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

Clapham Rents Set to Rise to £2,208 pm in Next 5 Years

It’s now been a good 18/24 months since annual rental price inflation in Clapham peaked at 4.3%. Since then we have seen increasingly more humble rent increases. In fact, in certain parts of the Clapham rental market over the autumn, the rental market saw some slight falls in rents. So, could this be the earliest indication that the trend of high rent increases seen over the last few years, may now be starting to buck that trend?

Well, possibly in the short term, but in the coming few years, it is my opinion Clapham rents will regain their upward trend and continue to increase as demand for Clapham rental property will outstrip supply, and this is why.

The only counterbalance to that improved rental growth would be to meaningfully increase rental stock (i.e. the number of rental properties in Clapham). However, because of the Government’s new taxes on landlords being introduced between 2017 and 2021, that means buy-to-let has (and will) be less attractive in the short term for certain types of landlords (meaning less new properties will be bought to let out).

Interestingly, countless market experts assumed at the start of 2017, that the number of rental properties would in fact drop throughout the year. The assumption being as the new tax rules for landlords started to kick in, landlords looked to kick their tenants out, sell up and invest their capital elsewhere. (Although ironically that would lower supply of rental properties, decreasing the supply, meaning rents would increase again!).

Anecdotal evidence suggests, confirmed by my discussions with fellow property, accountancy and banking professionals in Clapham, that Clapham landlords are (instead of selling up on masse), actually either (1) re-mortgaging their Clapham buy-to-let properties instead or (2) converting their rental portfolios into limited companies to side step the new taxation rules.

The sentiment of many Clapham landlords is that property has always weathered the many stock market crashes and runs in the last 50 years. There is something inheritably understandable about bricks and mortar – compared to the voodoo magic of the stock market and other exotic investment vehicles like debentures and crypto-currency (e.g. BitCoin).

Remarkably, there is some good news for tenants, as Tory’s recently published the draft Tenants’ Fee Bill, which is designed to prohibit the charging of tenants lettings fees on set up of the tenancy. However, looking at evidence in Scotland, I expect rents to rise to compensate landlords, thus hammering faithful tenants looking for long-term tenancy agreements the hardest. This growth will be on top of any usual organic rent growth. It really is swings and roundabouts!

So, what does this all mean for landlords and tenants in Clapham? In my considered opinion,

Rents in Clapham over the next 5 years will rise by 5.5%, taking the average rent for a Clapham property from £2,093 per month to £2,208 per month.

To put all that into perspective though, rents in Clapham over the last 12 years have risen by 35.8%. In fact, that rise won’t be a straight-line growth either, because I have to take into account the national and local Clapham economy, demand and supply of rental property, interest rates, Brexit and other external factors. Please see the graph for my projections

In the past, making money from Clapham buy-to-let property was as easy as falling off a log. But with these new tax rules, new rental regulations and the overall changing dynamics of the Clapham property market, as a Clapham landlord, you are going to need work smarter and have every piece of information, advice and opinion to hand on the Clapham, Regional and National property market’s, to enable you to continue to make money.

One place for that information is the Clapham Property Blog

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