haus properties chiswick property seminar 2013

Contents• About us• The 2012 Budget -2013 market• Is 2013 a good time to move out of London?• House prices in Chiswick• Market forecast

A little about us...

All eyes on London

Overall 2012 was a stimulating year for the London market, London fast became the most talked about city of the year - hosting The Olympics and celebrating the Jubilee (not to mention the masses of celebratory street parties)! London maintained its cosmopolitan image and retained the position of property capital of the world in spite of the tax uncertainties that got in the way.

London 2012

The Chancellor whacked up tax rates on prime properties in May 2012. We are now eleven months into the new period of 7% stamp duty for transactions over £2 million and 15% if buying the property using a “non-natural entity” such as an offshore or onshore company.

The mansion tax uncertainties ensured that the top end of the market slowed down, whereas properties below the £2 million threshold were being snapped up with a record amount of applicants per instruction.

The budget 2012

Research shows that transactions on £2 million + properties had fallen by over 40 % from April to September 2012 compared to 2011

The budget 2012

We have seen a surge of interest for properties over £2m since the 7% stamp duty has settled and the talk of mansion tax is unlikely to happen.

The budget 2012

Lending has remained the most noteworthy constriction on the housing market activity in 2012 – governments new Funding for Lending scheme is unlikely to make much difference to mortgage availability.

Funding for Lending scheme

50% cash buyers

The remaining 50% are mortgage buyers

We have seen that our average deposit size is over 50%

We have found that the Chiswick market hasn’t really been affected by lending restrictions because most of our buyers are...

Chiswick buyers

Generation rent

Generation Rent is a hangover from the credit crunch, now borrowers need to have considerably bigger deposits to get a mortgage. That’s forcing many more to rent, and that increased demand has, in turn, pushed rental prices up to record levels.

“Rent rises trap a generation who will never afford their own home.Stagnant wages, increasing rents and rising house prices mean would-be homeowners unable to save deposit for first property.”

The Guardian

Generation rent

The average rent in the capital has risen by 6% in the past year

by 16% in the past two years

and by a staggering 32% since 2009

Generation rent

People with the money to invest in a second property for a buy-to-let investment are tapping in to the generation rent market…including parents looking to get their children on the property ladder.

Generation rent

We have seen a massive increase in the amount of parents buying flats for their children as an investment/to get them on the property market

Buy-to-let

The buy-to-let market rocketed its way through 2012, with lending up to 11.5% of the total gross mortgage lending at £16.4bn (for a total of 136,900 buy-to-let loans).

That’s 19% higher than it

was in 2011, and its highest level for four years

Figures from the Council of Mortgage Lenders (CML)

Chiswick has taken on a 'trickle effect' of prime central London buyers that are looking for a similar lifestyle as prime central but avoiding the record high pricing. This Zone 2 theory is especially popular with young families, growing families and buy-to-let investors looking to cash in on “generation rent”

The PCL trickle effect

London’s west & south-west boroughs are attracting buyers looking for an alternative to Kensington and Chelsea

In 2012 39% of Chiswick buyers moved from Kensington and Chelsea, resulting in a significant impact on property values in Chiswick

The profile of Chiswick buyers is becoming increasingly similar to the profile of PCL buyers. In 2012 60 % of buyers purchasing property in Chiswick worth £2m plus originated from overseas…

The PCL Chiswick effect

The comparative cheapness of Chiswick, compared with its higher valued neighbours, remains a significant factor in attracting buyers to the area.A property in Chiswick is likely to cost an average of £700 per sq ft, compared with an average of £1,800 per sq ft in prime central London.

House prices in Chiswick

PCL trickle

Zone 2 demand

Foreign money

Young families

Safe investment

8-10% rise over the past year

Av selling time 2 weeks

80% of properties asking price or above

On average 15 buyers per property

Trends

Influx of European buyers paying asking price & above

Homeowners cashing in on the current supply/demand trend. Cashing in their home and moving out of the city.

Buy to let investors and parents looking to help their children onto the property ladder

Moving to the country

City prices vs. Country prices

Year Av price terraced Av detached house % differencehouse Chiswick South West

Nov 2007 £632, 025 £311,372 50.7% difference

Dec 2012 £885,200 £272,429 69.22% difference

City prices vs. Country prices

5 bedroom semi detached house £1,999,999

City prices vs. Country prices

6 bedroom detached with 1 acre land

£1,500,000

City prices vs. Country prices

2013-2014 The future

Despite the general market reports that there will be little PCL growth in the capital during 2013, our figures show that the lack of supply and continued demand for property from abroad and within the UK are even stronger. We are expecting an 5% growth in Central and West London.