This is the kind of property you need to be looking for NOW!

Not a pretty picture is it?

But let's face it, if you've been reading any of my articles in the past few years you will know that BUY TO LET IS DEAD anyway... No, not really, it's alive and kicking. Only if you do it right though, this isn't amateur hour anymore. You can't be lazy. You can't just buy a new build property and wait for it to appreciate because prices are rising 15% per year. You can't expect tenants to turn up and pay top dollar for your bland new build because guess what? Every other T, D and H has bought a flat in that same development to do exactly the same! You are now in a race to the bottom. Who can take the lowest yield will win. A race I am not interested in. And here's why you shouldn't be either.... it just doesn't work for buy to let any more. Buy one to live in, they're lovely, go on. But don't rent them out and expect great returns. Far from it...

So how do you make buy to let work in this day and age? You need to ADD VALUE. If you are not ADDING VALUE and differentiating you may as well pack your bags and go home because property investing in 2018 is NOT FOR YOU. You have to be adding value. How do you add value? Buy  something rubbish and make it beautiful. More on numbers later, but if this is the first time you are reading my blog then do head over to the website and read a few articles. Have a look at some YouTube videos. You will start to understand. You need to be buying cheap and selling high. In between is where you make your margin. People sell properties cheap because they can't be bothered. Time is money they say. Well you are an astute property investor so your time has to go into adding value. And that doesn't mean picking up the tools yourself. It means finding the right people to to just that for you.

The above picture is of a property I went to see the other day. LOOK AT THIS OPPORTUNITY to add value! People want an easy life so they buy new builds to live in - they don't have time or expertise to be dealing with builders and the like. That's where I come in! I have helped many investors source, refurbish, dress, and then either sell or let the property. 15 years of experience is for hire. The latest project gave my investor a profit of £40,000 in 6 months with a £95,000 investment. That's pretty good! Go on, have a look at those YouTube videos to see some of my projects as well as ones that I've done for investors.

Here's a sneaky little video, I can't begin to tell you what a beauty this property is! It's literally crumbling to pieces!! 😍😍😍

So what do you need to do? You need be buying cheap(er) property. And that doesn't mean going out there and overpaying for a wreck. Rule of thumb is that you should be able to add £2-3 worth of value for every £1 spent on improvement works. This particular property will be secured for £250,000. I will spend £50,000. It will be worth £400,000. Bear in mind I've budgeted for lease extension, the actual building works are likely to be around £35,000, so my "rule of thumb" holds true. Start with the end in mind. Work backwards. Take the "done up" value and start subtracting your costs in order to work out what you're going to pay. 

There, I've said it. Now go invest. Properly and profitably. Don't expect the same results with what you were doing 10 years ago. You need to adapt, and you profit handsomely from doing so.

If you need help finding an awesome investment opportunity then get in touch. If you are not on my radar I can't help you. You need to take the first step. I have a limited amount of money so I can only buy so many great properties. I work for other investors all the time as they like to benefit from my knowledge and expertise; I happily part my knowledge, but do reach out.

Come and meet up in person at the Clapham Property Meet or drop me a line on a social platform of your choice. I speak perfect English so telephone is also an option if you prefer: 020 3637 4474.

The end of one deal means the start of many Joint Ventures in Clapham! Or Deptford....

Well it's done! This was probably the easiest deal I have ever done. You will remember reading about this one for sure, but now that it's all completed, done and dusted I'd like to give you a bit of a summary.

A client came to me asking for my expertise. He wanted to acquire a property and use it as a vehicle for wealth. He wasn't ready to become a landlord yet, he wanted to "grow his cash pot" - his words. Amazing coincidence was that a day before I had let a deal go because it did not fit my criteria - everyone knows I love a good rental property!

This particular property needed to get sold ASAP and presented a prime opportunity for a quick refurb and resell, a Buy-to-Sell (BTS).

Terms were agreed between the investor and I and I would charge a fee for the project management and the sourcing of the investment, it came through my network of contacts of course!

I priced up the deal and the property was purchased. Alas we did encounter some problems during the refurb. The spec that I wanted would be considerably dearer than the builder had anticipated because of some unforeseen electrical works and a few other things. The investor, quite rightly so, didn't want to spend more money but downgrade the spec. Despite me indicating that the spec would need to be high to sell in this market for top dollar, he didn't want to take the risk of overspending and underachieving. Despite underspending being a surefure recipe for underachieving I felt I had to take this on - my good name was on the line! I opted to spend the money out of my own pocket, agreeing that I would keep the difference if the flat achieved over "x" on resale. The investor was very happy with that. It gave him a guaranteed return, and gave me an incentive to ensure the best possible result with no impact on his overall return. A win-win!


So without further ado here are some before and after shots of the property. If you click on the link below you'll be taken to the full video that I made to showcase this lovely refurbishment. 6 months from start to end, what a result!

Want to know more? Drop on down to the Clapham Property Meet next week, we're having a bit of a social gathering and I'm putting some food on to celebrate, see you there👉👉www.claphampropertymeet.co.uk!

210 First Timer Buyers in Clapham Bought Their First Home in 2017

A little bit of good news this week on the Clapham Property Market as recently released data shows that the number of first time buyers taking out their first mortgage in 2017 increased more than in any other year since the global financial crisis in 2009. The data shows there were 210 first time buyers in Clapham, the largest number since 2006.

I expect in 2018 that this increase of first time buyers will level out and maybe dip slightly as, nationally, figures demonstrate that first time buyer’s average household income was £40,691 and this represented 17.3% of their take home pay. Although, it might surprise readers that it is actually cheaper to buy than it is to rent at the ‘starter home’ end of the housing market. Many of you can remember mortgage rates at 12% ... even 15%. Today, at the time of writing this article, I found on the open market, 189 first time buyer mortgages at 95% (meaning only a 5% deposit was required) with 3 year fixed rates from a reputable High Street bank at 2.49% ... they even did a 3 year fixed rate 100% mortgage for 2.89%!

Interestingly, looking at the other end of the market, the buy-to-let investment in Clapham was subdued, with only 44 buy-to-let properties being purchased with a mortgage. However, I must stress, whilst there is no hard and fast data on the total numbers of landlords buying buy-to-let, as HM Treasury believes only 30% to 40% of buy-to-let property is bought with a mortgage. This means there would have been further cash only buy-to-let purchases in Clapham – it’s just that the data isn’t available at such a granular level.

In terms of the level of mortgage debt in Clapham, looking specifically at the SW4, SW11 and SW12 postcodes, you can see from the graph there has been a steady rise in borrowing over the last few years.

This is pleasing to see, as new mortgage debt is created by first time buyers, buy-to-let landlords and home movers themselves, that is being roughly equalled by the amount being paid off with mature mortgaged homeowners in their 50’s and 60’s finally paying off their mortgage.

So, what does all this mean for the Clapham Property Market? Well, the stats paint a picture, but they don’t inform us of the whole story. The upper end of the Clapham property market has been weighed down by the indecision around the Brexit negotiations and rise in stamp duty in 2014, when made it considerably more expensive to buy a home costing more than £1m. The middle part of the Clapham property market has been affected by issues of mortgage affordability and lack of good properties to buy, as selling prices have reached the limit of what buyers can afford under existing mortgage regulations. The lower to middle Clapham property market was hit by tax changes for buy-to-let landlords, although this has been offset by the increase in first time buyers.

If you are in the market and selling now and want to ensure you get your Clapham property sold, the bottom line is you have to be 100% realistic with your pricing from day one and you might not get as much as you did say a year ago (but the one you want to buy will be less – swings and roundabouts?). I know it’s not comfortable hearing that your Clapham home isn’t worth as much as you thought, but Clapham buyers are now unbelievably discerning.

So, if you are thinking of selling your Clapham property in the coming months, don’t ask the agent out a few days before you want to put the property on the market, get them out now and ask them what you need to do to ensure you get maximum value in the shortest possible time. I, like most Clapham agents, will freely give that advice to you at no cost or commitment to you.

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.

An extension could add £150,625 to the value of your Clapham home

As our families grow bigger the need for more space, be that bedrooms or reception rooms, has grown with it. Also, as our older generation lives longer and nursing home bills continue to rise quicker than a rocket on the 5th of November (the average nursing home bill in the area being £862.50 per week) many families are bringing two households into one larger one.

So, should you move somewhere larger, or extend your Clapham property to make it large enough for you and your family? In some circumstances the choice has been made for you. If you live in an apartment with no garden, there isn’t much of an opportunity of making it larger. But if you have a house with a garden or an attic with sufficient headroom, extending your home becomes a real prospect.

Even if it makes more sense to extend or move, the choice hangs on a number of different dynamics – your future plans, money (both saved and access to finance), in what way you are emotionally attached to your home, the particular area of Clapham you live in and finally, the type/style of house you prefer.

Interestingly, the average British home is 968 sq.ft, which as you can see from the table, is in the middle of developed nations when it comes to the size of a property. Of the 1.11m homes sold in 2016 in England and Wales, the average floor area of the houses was 1,119 sq.ft – that’s about an eighth the size of an Olympic sized swimming pool. Apartments averaged 530 sq.ft that’s just over ten times bigger than an average garden shed. Looking at apartments and houses together, the average size of properties sold in England and Wales 968 sq.ft – are slightly smaller than the European average, and much smaller than households in the US.

So back to the question in hand.. extending does mean you will have a lot of inconvenience whilst the work is being carried out. The location of your Clapham property, the quality of construction, what type of room(s) you want to add, your plot, neighbouring building lines, planning regulations and the overall demand for your type of Clapham home, will make a vast difference to the financial repercussions of extending versus moving.

A medium-sized 270 sq.ft single storey extension (say around 17ft x 16ft) will add on average £150,625 to the value of a property in Clapham

It’s important to note the end result of the extension needs to be a sensible and realistic home. A two bed semi-detached house extended to a four bedrooms with no lawn or driveway, or a home with outsized reception rooms downstairs and miniscule bedrooms upstairs, could be problematic if and when you come to sell your home in the future. Irrespective of whether your strategy is to live in your extended home for a long time, you will want to side-step outlaying a lot of money on costly building work that will make it tougher to sell.

In terms of what it would cost to build an extension, you can expect to pay on average between £140 to £200 per sq.ft, depending whether the extension is a single or double storey extension and other factors including finish and type of extension (note – I have seen it cost a lot more than these figures – so please speak with a builder) … So taking a mid line figure, that same 270 sq.ft extension on your Clapham home would cost on average £55,080.

However, moving means there are substantial costs incurred - Estate Agency fees, Removal Van, Survey Fees, Legal fees and Stamp Duty on the property you are buying. Neither option is the obvious choice and comparing the costs of extending your Clapham home to that of moving is not a stress-free undertaking.

How realistic each option is will probably come down to one thing .. your mortgage provider. You will need a considerable sum of equity in your Clapham home before you can think of increasing your mortgage more, because most lenders will require you to have at least 10% to 20% equity left in your property after the extension or move has been done.

The best advice I can give .. don’t assume anything …. get advice and opinion from builders, mortgage brokers, architects, mortgage people and of course… an agent. Look at your options and make an educated decision with all the superficial and objective facts in front of you.

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 – The 22.7% ‘New Build Premium’

According to the National House Building Council (NHBC), more than 17,800 new homes were registered to be built in London last year, an increase of 1.5% on 2016 levels of 26,150 dwellings. Great news when you consider it is one of the highest number of new builds in the region since the pre-recession levels of the Credit Crunch and the uncertainty of Brexit and the General Election.

So, when a landlord recently asked me why the brand-new property she was considering buying was a lot more expensive compared to a second-hand/existing property of similar type, accommodation, location and structure I thought this would make a fascinating topic to do some homework on … homework I want to share with the homeowners and landlords of Clapham.

You might believe that the difference between purchasing a new build home against purchasing a second-hand/existing home is just individual preference. Some buyers/tenants like the ostentatious trendy modern feel of a new home, whilst others like a home that has stood the test of time.

So, what is the right answer? Well, I am going to be looking at some statistics that shows there is a real difference in the Clapham and Lambeth London Borough Council area’s property market when in to comes to new vs existing homes and the price paid. Looking at the average price paid for existing (second-hand) versus a brand new home since 1996, one can see from the graph it makes interesting reading.

On this second graph, one can see the percentage difference in average price paid between new and existing…

Yet possibly nothing is ever that easy, as there are issues with these statistics.

Whilst, the overall average for the whole Lambeth London Borough Council area for the ‘new build premium’ (new build premium being the additional price a buyer pays for buying a new property compared to a second-hand one) over the last 21 years has been 22.7%. These statistics actually show that it is problematic to compare like with like because it is impossible to completely separate all the different factors of type, accommodation, location and structure etc.

One would have to have a mirror image second-hand Clapham home and a duplicate new build right next door to each other, then calculate out which Clapham house buyers or Clapham buy to let landlords would pay more for? Perhaps if everything was the same (all things being equal), there might not be any difference in what buyers would be prepared to pay… but then again, it’s like new cars versus cars that have a few hundred miles on the clock ... there is always a difference on the forecourt …. because things are never wholly equal.

What I do know is that my statistics of the Clapham property market show that new build Clapham apartments are worth more to people than their second-hand equivalents, whilst the difference is negligible between new build Clapham detached houses and second-hand Clapham detached houses.

However, I believe the really important lesson in all these statistics is the fact that ‘new build premium’ for new-build versus buying a second-hand property increases in a buoyant market and reduces in a tougher market. So, if you want to buy new and the only consideration is money … try buying in a tougher challenging property market.

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’s ‘Millennials’ set to inherit £200,920 each in property!

That got your attention ... didn’t it!

But before we start, what is Generation X, let alone Generation Z, Millennials, Baby Boomers ... these are phrases banded around about the different life stages (or subcomponents) of our society. But when terminologies like this are used as often and habitually as these phrases (i.e. Gen X this, Millennial that etc.), it appears particularly vital we have some practical idea of what these terms actually mean. The fact is that everyone uses these phrases, but often, like myself, they are not exactly sure where the lines are drawn ...until now…

So, for clarity …

Generation Z: Born after 1996
Millennials: Born 1977 to 1995
Generation X: Born 1965 to 1976
Baby Boomers: Born 1946 to 1964
Silent Generation: Born 1945 and before

My research shows there are 1,152 households in Clapham (SW4) owned by Clapham Baby Boomers (born 1946 to 1964) and Clapham’s Silent Generation (born 1945 and before). It also shows there are 11,587 Generation X’s of Clapham (Clapham people born between 1965 to 1976). Looking at demographics, homeownership statistics and current life expectancy, around two-thirds of those Clapham 11,587 Generation X’s have parents and grandparents who own those 1,152 Clapham properties.

… and they will profit from one of the biggest inheritance explosions of any post-war generation to the tune of £994m of Clapham property or £128,652 each but they will have to wait until their early 60’s to get it!

However, it’s the Millennials that are in line for an even bigger inheritance windfall.

There are 12,153 Millennials in Clapham and my research shows around two thirds of them are set to inherit the 1,887 Clapham Generation X’s properties. Those Generation X’s Clapham homes are worth £1.629bn meaning, on average, each Millennial will inherit £200,920; but not until at least 2040 to 2060!

While the Clapham Millennials have done far less well in amassing their own savings and assets, they are more likely to take advantage of an inheritance boom in the years to come. This will probably be very welcome news for those Clapham Millennials, including some from poorer upbringings who in the past would have been unlikely to receive gifts and legacies.

However, inheritance is not the magic weapon that will get the Millennials on to the Clapham housing ladder or tackle growing wealth cracks in UK society, as the inheritance is unlikely to be made available when they are trying to buy their first home…but before all you Clapham Millennials start running up debts, over 50% of females and around 35% of men are going to have to pay for nursing home care. Interestingly, I read recently that a quarter of people who have to pay for their care, run out of money.

So, if you are a Clapham Millennial there potentially will be nothing left for you. Of course, most parents want to give their children an inheritance, the consideration that what you have worked genuinely hard for over your working life won’t go to your children to help them through their lives is a really awful one … maybe that is why I am seeing a lot of Clapham grandparents doing something meaningful, and helping their grandchildren, the Millennials, with the deposit for their first house.

One solution to the housing crisis in Clapham (and the UK as a whole) is if grandparents, where they are able to, help financially with the deposit for a house. Buying is cheaper than renting – we have proved it many times in these articles … so, it’s not a case of not affording the mortgage, the issue is raising the 5% to 10% mortgage deposit for these Millennials.

Maybe families should be distributing a part of the family wealth now (in the form of helping with house deposits) as opposed to waiting to the end… it will make so much more of a difference to everyone in the long run.

Just a thought?

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’s £96,067,680 “Rentirement” Property Market Time Bomb

Yes, I said ‘rentirement’, not retirement ... rentirement and it relates to the 193 (and growing) Clapham people, who don’t own their own Clapham home but rent their home, privately from a buy to let landlord and who are currently in their 50’s and early to mid-60’s.

The truth is that these Clapham people are prospectively soon to retire with little more than their state pension of £155.95 per week, probably with a small private pension of a couple of hundred pounds a month, meaning the average Clapham retiree can expect to retire on about £200 a week once they retire at 67.

The average rent in Clapham is £2,074 a month, so a lot of the retirement “income” will be taken up in rent, meaning the remainder will have to be paid for out their savings or the taxpayer will have to stump up the bill (and with life expectancy currently in the mid to late 80’s, that is quite a big bill … a total of £96,067,680 over the next 20 years to be paid from the tenant’s savings or the taxpayers coffers to be precise!

You might say it’s not fair for Clapham tax payers to pick up the bill and that these mature Clapham renters should start saving thousands of pounds a year now to be able to afford their rent in retirement. However, in many circumstances, the reason these people are privately renting in the first place is that they were never able to find the money for a mortgage deposit on their home in the first place, or didn’t earn enough to qualify for a mortgage …and now as they approach retirement with hope of a nice council bungalow, that hope is diminishing because of the council house sell off in the 1980’s!

For a change, the Clapham 30 to 40 somethings will be better off, as their parents are more likely to be homeowners and cascade their equity down the line when their parents pass away. For example, that is what is happening in Europe where renting is common, the majority of people rent in their 20’s, 30’s and 40’s, but by the time they hit 50’s and 60’s (and retirement), they will invest the money they have inherited from their parents passing away and buy their own home.

So, what does this all mean for buy to let landlords in Clapham?

Have you noticed how the new homes builders don’t build bungalows anymore ... in fact some would said the ‘bungalow storey’ is over. The waning in the number of bungalows being built has more to do with supply than demand. The fact is that for new homes builders there is more money in constructing houses than there is in constructing bungalows. Bungalows are voracious when it comes to land they need as because bungalow has a larger footprint for the same amount of square meterage as a two/three storey house due to the fact they are on one level instead of two or three.

That means, as demand will continue to rise for bungalows supply will remain the same. We all know what happens when demand outs strips supply … prices (i.e. rents) for bungalows will inevitably go up.

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 Private Rents Hit £35.56 per sq. foot

As I am sure you are aware, one the best things about my job as an investor is helping Clapham other investors with their strategic portfolio management. Gone are the days of making money by buying any old Clapham property to rent out or sell on. Nowadays, property investment is both an art and science. The art is your gut reaction to a property, but with the power of the internet and the way the Clapham property market has gone in the last 11 years, science must also play its part on a property’s future viability for investment.

Many metrics most property professionals (including myself) use when deciding the viability of a rental property is what properties are selling for, the average rent, the yield and an average value per square foot.

However, another metric I like to use is the average rent per square foot. The reason being is that is a great way to judge a property from the point of view of the tenant ... what space they get for their money. Now of course, location (location, location in a Phil and Kirstie style) has a huge influencing factor when it comes to rents (and hence rent per square foot). Like people buying a property, tenants also have that balancing act between better/worse location, more vs. less money and size of accommodation (bigger and more rooms equalling more money) and where they live (location) verses making ends meet.

Interestingly, I know there are a lot of you in Clapham who like to see my statistics on the Clapham property market, so before I talk about the rental figures per square foot, I wanted to share the £ per square foot on the values. In Clapham, the current AVERAGE figures are being achieved (and I must stress, these are average figures, so there will an enormous range in these figures), but on average, properties in Clapham, split down by type are achieving …

• Clapham Detached Property - £829 / sq ft
• Clapham Semi Detached Property - £816 / sq ft
• Clapham Terraced Property - £801 / sq ft
• Clapham Apartments - £827 / sq ft

So, the rental figures:

The extent of space you get for your rent is replicated in the space you get for your money when buying a property. The average size of rental property in the Clapham area is 711.3 sq ft (interesting when compared to the national average of 792.1 sq ft)

This means the average rent per square foot currently being achieved on a Clapham rental property is £35.56 per sq ft per annum

So, what we can deduce from this? Well the devil is always in detail!

Whilst I was able to quote the average overall figure and the fact my research showed it was quite clear from data that there is relationship between the average £ per sq ft figures on property values and average £ per sq ft on rental figures as a property grows in size. However, something quite intriguing happens to those figures, in terms of what the property will sell for and what it will rent for, when we change and increase the size of the property.

My research showed that doubling the size of any Clapham property doesn’t mean you will double the value of it … in either value or rent. This is because the marginal value increases diminish as the size of the property increases. In layman’s terms … Subject to a few assumptions, double the size of the house doesn’t mean double the value … what really happens is a doubling of the size gives only an approximately 40% to 65% uplift in value, but here comes the even more fascinating part … when it came to the rental figures, double the size of the house meant only 20% to 45% in increase in rent.

In a future article, I will be discussing the actual added value an extension can bring ... but in the meantime, in an overall and sweeping statement, most of the time it makes sense to extend if you are going to live in the property as long as the extension is proportionate to the property, but if you are going to rent it out ... possibly not.

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.