What will happen to the rental market in Hampstead and Camden Town in 2017?
- Credit: Archant
New report predicts that dropping London rents will remain flat for 2017, but what does this mean for local landlords and tenants?
For years the rest of the UK has looked on in astonishment as London rents have soared, but this could be about to change.
A new rental forecast out today from Rightmove has predicted that rents will rise by up to 4 per cent outside London, but rents in the capital will remain flat.
Asking rents in inner London have fallen 4.4 per cent annually according to Rightmove.
Whilst the changes to stamp duty and tighter lending criteria might lead to a tightening of supply and increased rent in some areas, this is not the case in areas of north London.
Arron Bart, director of lettings of Savills in Hampstead warned landlords against taking the national figures to heart and encouraged them to focus instead on the realities of a hyper local market.
“It’s a microclimate up here,” he said.
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The most recent in house figures from Savills show that north London asking rents in the £1000 pw or lower bracket are down between one and five per cent, whilst those charging upwards of £1000 pw have seen reductions of between 15 and 20 per cent.
One reason for the drop in prices is a reduction in demand.
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“In the Hampstead market high value rents are traditionally taken by people in the financial services, but less and less people are coming over,” he explained.
Not only is demand in certain areas down, but supply is up.
“The reasons for this are threefold, explained Mr Bart. “Firstly, there are unprecedented numbers of investment buyers in new builds. Secondly, there was a spike in one-off buy-to-let purchases before the changes to Stamp Duty last year. Thirdly, there are the accidental landlords.”
Accidental landlords are the owners of prime properties who have decided to rent their homes out after being unable to find a buyer, in part due to the changes in stamp duty.
“My advice to landlords is that in reality there is no point in being over enthusiastic in your pricing. You need to market it sensibly,” he said.
“With websites such as Rightmove prospective tenants can see if something has been on the market for a few months and it can put them off.”
Despite the fractional reductions in asking prices for rents, it’s not entirely good news for tenants.
“Arguably tenants may have the upper hand, but it’s still an expensive market,” he said.
Rodney Lavictoire, associate director of lettings of Goldschmidt and Howland in Camden and Hampstead agrees that asking rents have had to be lowered in the prime brackets, but claims rents in areas such as Camden Town have remained stable year on year.
He is optimistic that 2017 is off to a good start.
“The level of enquiries is up for this time of year,” he said. “We’ve got a lot of very motivated applicants.”
After extended periods at home over the holiday season it seems local clients are particularly keen to improve their living conditions, so much so that the choicest properties are being snapped up before they reach the market.
However he cautions that landlords still have to be prepared to price realistically the first time round or risk properties lying vacant for extended periods.
Despite the changes to tax relief it hasn’t been all doom and gloom for the buy-to-let market either, and Mr Lavictoire says he has seen a lot of lettings come through from the sales department.
“Buy-to-let has never been fruitful Hampstead, but in traditional renter areas such as Camden Town and West Hampstead we’ve seen lots of enquiries and the Kidderpore Avenue development is proving popular.”
For landlords then the overriding message is clear: don’t ask too much only to watch your letting opportunity languish on a property listings websites.
As for tenants although there are more properties on the market you still need to be in with the agent to get first dibs on the best rentals, and whilst rents aren’t rocketing like they used to you’ll still need to be prepared to pay north London’s eye watering fees.