Clapham House Prices vs Clapham Rents since 2006

The Clapham housing market is a fascinating beast and has been particularly interesting since the Credit Crunch of 2008/9 with the subsequent property market crash. There is currently some talk of a ‘property bubble’ nationally as Brexit seems to be the ‘go-to’ excuse for every issue in the Country. Upon saying that, looking at both what we do as an agent, and chatting with my fellow property professionals in Clapham, the market has certainly changed for both buyers and sellers alike (be they Clapham buy to let landlords, Clapham first time buyers or Clapham owner occupiers looking to make the move up the Clapham property ladder).

Clapham house values are 5.7% lower than a year ago, and the rents Clapham tenants have to pay are 0.3% lower than a year ago

When we compare little old Clapham to the national picture, national property values have risen by 0.4% compared to last month and risen by 3.0% compared to a year ago, and this will surprise you even more, as nationally, property values are 19.8% higher than January 2015 (compared to 11.4% higher in the EU in the same time frame).

However, if we look further back...

Since 2006, Clapham house values are 111.7% higher, yet the rents Clapham tenants have had to pay for their Clapham rental property are 32.6% higher

...which sounds a lot, yet UK inflation in those 12 years has been 42%, meaning Clapham tenants are 9.4% better off in ‘real spending power terms’.

Looking at the graph, the rental changes have been much gentler than the roller coaster ride of property values. I particularly want to bring to your attention the dip in Clapham house values (in red) in the years of 2008 and 2009 ... yet as Clapham property values started to rise after the summer of 2009, see how Clapham rents dipped 6/12 months later (the yellow bars)…. Fascinating!

So, we have a win for tenants and a win for the homeowners, as they are also happy due to the increase in the value of their Clapham property.

However, maybe an even more interesting point is for the long-term Clapham buy to let landlords. The performance of Clapham rental income vs Clapham house values has seen the resultant yields drop over time (if house prices rise quicker than rents – yields drop).

Whilst, it’s true Clapham landlords have benefited from decent capital growth over the last decade –with the new tax rules for landlords – now more than ever, it’s so important to maximise one’s yields to ensure the long term health of your Clapham buy to let portfolio. More and more I am sitting down with both Clapham landlords of mine and landlords of other agents who might not be trained in these skills - to carry out an MOT style check on their Clapham portfolio, to ensure your investment will meet your future needs of capital growth and income. If you don’t want to miss out on such a MOT check up, drop me a line – what have you got to lose? 30 minutes of time against peace of mind - the choice is yours.

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?

Great(er) Expectations: Why Clapham Home Sellers are Having to Reduce Their Asking Prices by an Average of £54,500 Each

As we leave the memorably hot summer behind us, some interesting statistics have come to light on the Clapham Property Market which will be thought provoking for both homeowners and buy to let landlords alike.

Over the last 12 months 756 households have changed hands in Clapham, interesting when compared with the 10-year average of 1,159 households per year.

Yet, for the purpose of this week’s article, I want to discuss the pricing of the current crop of Clapham’s property sellers and the prices they are asking for their homes and the prices they are achieving (or not as at the case may be). It is so important for all property owners to know the real story, so they can judge for themselves where they stand in the current Clapham housing market, thus enabling them to make suitable and informed decisions… and that is why, in my blog about the Clapham Property Market, I pride myself in telling the people of Clapham the real answers, not just the ones they want to hear.

The national average of homes selling at or above the asking price currently stands at around 10%, so around 90% go below the asking price – but by how much? Well according to Rightmove, in the Clapham area, the average difference between the ‘FINAL asking price’ to the price agreed is 4.4% … yet note I highlighted the word FINAL in the last statement.

You see some Estate Agents will deliberately over inflate the suggested initial asking price to the house seller, because it gives them a greater chance to secure the property on that agent’s books, as opposed to a competitor. This practice is called overvaluing. Now of course, each homeowner wants to get the most for their property, it is quite often their biggest asset – yet some agents know this and prey on those house sellers. You might ask, what is the issue with that?

Well, you only get one chance of hitting the market as a new property. Everyone has access to the internet, Rightmove and Zoopla etc, and your potential buyers will know the market like the back of their hand. If you have a 3 bed semi that is on the market for a 3 bed detached house price.. those buyers will ignore you. Your Clapham property sticks on the market, potential buyers will keep seeing your Clapham property on Rightmove each week, then start to think there is something wrong with it, dismiss it even further, until you, as the house seller have to reduce the asking price so much (to make it appear inexpensive) to get it away. According to our own research, the average house buyer only views between 4 and 5 houses before buying – so don’t assume viewers will come round your optimistically priced (i.e. overvalued) property, thinking they will knock you down – no quite the opposite!

So how widespread is overvaluing in Clapham? The results might surprise you …

43.9% of properties in Clapham, currently on the market, have reduced their asking price by an average reduction of 6.5% (which equates to £54,500 each)

So, all I ask is this.. be realistic and you will sell at a decent price to a decent buyer. First time – every time – enabling you to move on to the next chapter of your 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.

Latest Peckham project - complete!

As you will know I'm always working on a project or two, but I've been so busy recently I've not had a moment to post the most recent completion (of refurbishment that is).

I've made a little video walkaround so that you can see the finished product. A light blue (Ocean Skies) theme this time; fresh, bright and airy. In brief this property was fully refurbished. This included rewiring, new plumbing, new woodwork throughout and of course a new kitchen (in a new location) and a new bathroom.

Have a look at the video and I look forward to hearing your comments.

Living Room - Before

Living Room - After












Video:

I hope you enjoyed my video. 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.