A strong start for Hampstead property with a shaky outlook until post-election
PUBLISHED: 09:48 29 December 2014 | UPDATED: 17:12 06 January 2015
We ask the experts to look back on the year just gone and give us their predictions for the 2015 Hampstead property market.
Helen Duncan, co-director Property Divas
Sitting here with a Carluccio’s coffee (perfectly situated next to Divas HQ), it is an interesting question to be asked to take stock of the past 12 months and consider where 2015 might take us.
2014 proved a busy year for us Divas.
Since January 2012 the average asking price (not necessarily realised price) in London has increased by 36 pc.
It was thus not great news for buyers as prices escalated in spring this year and took on unprecedented heights, with many owners wishing to take advantage of the tidal wave of activity and sell; often properties that had been owned for many years, thus realising large equities.
We saw many disappointed buyers deciding to continue renting and instead explore buy-to-let opportunities, thereby allowing them to invest in primary post codes - a difficult task when properties were selling like hot cakes.
The Stamp Duty reform removed the categories of values which caused “black holes” around thresholds. Its implementation with no prior notice, literally overnight, was designed to avoid a flood of higher-level stock to market pre-implementation – clever!
Rentals showed a lazy start to the year in contrast to sales but picked up momentum from May/June, a rise which appears to be continuing.
However, rental returns remain distressed and have failed to keep up with inflated sales prices in prime postcodes where investors buy in high and accept low yields in anticipation of ongoing monumental capital growth.
And so to 2015.
The jury is out as to whether Prime London is about to embark on a chapter of more restrained growth - some think so, with analysts predicting growth in the region of 20 to 25 pc over the next five years
Many people want a slice of the London cake and energy is being put into new neighbouring areas (look where regeneration is already happening) which allow investment at a lower level, in the hope that the owner can then sit back and “watch his garden grow”.
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Frank Townsend, a director at Savills Hampstead
We can all be forgiven for thinking how bad our lot is in London what with the prospect of Mansion Tax on the lips of many people and the recent changes to Stamp Duty. This together with a looming General Election might suggest that the market should be beating a retreat.
However, while there is clearly going to be some fallout from the restructuring of Stamp Duty, the market is a lot more resilient than we sometimes give it credit for.
We have more buyers looking for properties in Hampstead now in all price ranges up to £2 million than we had last year and most buyers looking below £1 million are now better off.
That said the General Election will mean that some people will mark time pending the outcome and one might find that this pent up demand results in a quite significant bounce back in terms of activity and prices post 5 May.
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James Morton, director, and Chris Cooper, associate director, Benham & Reeves
This year has been a tale of two markets for property in Hampstead.
The year started in spectacular fashion, with many properties receiving multiple full asking price offers resulting in “sealed bid” scenarios. As a result the prices were escalating at a dramatic rate and reached an unsustainable level. Many properties over-shot their true values and as a result the prices needed to be adjusted. The media perceived this as the market falling, which was not actually the case.
Autumn and Winter brought a more balanced and stable market, with many buyers able to buy in a more reasonable timeframe whilst still paying top prices. During this period we sold a large garden maisonette in Bracknell Gardens for a figure in excess of £4.4m.
The latter part of the year has been very patchy and prices have generally plateaued at best. The market was fast becoming over heated and the publicity over a possible mansion tax took the steam out of it.
With the recent increase in Stamp Duty (SDLT) and upcoming General Election in May, I expect the top end of the housing market to be relatively subdued until May however, the market for apartments should be less affected as the threat of the mansion tax is less relevant for them.
Once the uncertainty of the election has passed, things will get busier again, with prices lifting.
While some buyers will watch and wait in the early part of 2015, others will take advantage and probably buy well.
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Thom Atkins, lettings manager, Knight Frank Hampstead
At Knight Frank Hampstead we found that 2014 was characterised by very high levels of demand in quarters one and two and a tail off in demand in quarter three as the uncertainty surrounding the elections came into strong focus for buyers and renters alike.
The early part of the year saw high levels of demand in and around Hampstead particularly from families during the summer and professional couples looking for a little peace and quiet away from Central London.
2015 is looking to be an interesting year for the rentals market as we predict more renters coming away from the sales market for a year or two whilst they take stock of what the market is doing in the build up to and post-election. Currently we have experienced a 158 pc increase in the number of actively looking tenants.
Due to the increased levels of demand over the coming months you would expect rental values to increase across the NW3 area and beyond. This, along with increased levels of stock due to vendors flipping their properties to the rentals market will make for a very busy start to 2015.
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