Are Attitudes to Home Ownership changing in Fitzrovia?

Speaking to a Bank Manager the other day in Fitzrovia, we got talking about the state of the Fitzrovia property market and whether we, as a Country, are turning more and more to the European style of property ownership, where it is the norm to rent as a opposed to automatically buying once you have a good job etc.

Even though a recent report by the Halifax stated homeownership remains a goal for 85% of twenty to forty five year olds, there is information emerging that attitudes in the UK towards renting your own home as opposed to owning it have softened, showing more and more, that renting is being seen as a life style choice.  In fact it is recognised in learned circles that the cycle of renting is also repeated by the fact that people who grow up primarily in rented accommodation are themselves more likely to rent than buy.

The biggest barrier often mentioned to buying a house is the claim that they are not buying property at the moment because of a lack of sufficient wages and by the high level of deposits but in Fitzrovia, if a couple, both on the average Fitzrovia salary of £39,462 pa, assuming they had a reasonable credit history they would be showered with lenders offering them a 95% mortgage (a reasonable credit history means they haven’t defaulted on loans, paid all their bills on time nor got any County Court Judgements. Just because you missed just one credit card payment won’t mean you have messed up your credit score and your ability to get a mortgage) and they would need to find a sizeable, but nothing stratospheric, £18,500 as a deposit to buy a decent studio apartment in neighbouring Bloomsbury...  it comes down to the perceived capability of the youngsters in Fitzrovia to buy nowadays.

Interestingly, when I looked at the Fitzrovia figures, the average Fitzrovia tenant has a slightly younger profile (especially the 25 to 34 year old age range) than the English and Welsh average, as can be seen from the graph below. What interested me as well was the relatively large number of people renting over the age of 50! I know we have a large number of mature tenants at our agency, but I always thought that was the exception to the rule. Obviously not!  (And that is good news for landlords as they make excellent tenants)

So what does all this mean for Fitzrovia landlords and future Fitzrovia landlords? I honestly believe there is a difference between the hope and perceived capability of the younger generation to buy a home. Although homeownership is seen as advantageous by a majority, many tenants admitted in the Halifax report they are not taking the steps they need to purchase their own home. As the local authority aren’t building any properties in Fitzrovia, people still need a roof over the head, and that is why, as I mentioned a few weeks ago in the Fitzrovia Property Blog, the demand for rental properties will only continue to steadily rise in the coming decade. 

If want to know where the Fitzrovia Property market is heading and where you should (and shouldn’t buy), maybe the one place you should visit is the Fitzrovia Property Blog www.fitzroviapropertyblog.com or send me an email to benjamin.draper@martinco.com

Fitzrovia Rent’s On The Rise

Considering we are a quarter of the way through 2015 and Easter under our belt, I was talking to landlord from Holborn the other day about what is happening to the level of rents that are being achieved in the Fitzrovia property market.

In terms of rents in Fitzrovia, it appears that rents being achieved for new rentals (ie when the tenant moves out and new tenant moves in) have risen in the order of 9.7% in the last 12 months on top of the range properties, yet growth has remained moderately static for more basic properties. However, landlords with existing sitting tenants, irrespective of age are not increasing their rents, as most landlords prefer to keep their existing tenant paying the same rent and have the peace of mind that their tenant remains, paying the rent (thus reducing the risk of a void period).

It must be remembered rents only rose by 0.2% over the two years of 2008 and 2009, due to an oversupply in the rental market in those years. A lot of the people who couldn’t sell their property in Fitzrovia in 2008/9 when the Credit Crunch hit in 2008, decided to let their house out instead of selling at a loss. In fact, the number of houses on the market in Fitzrovia dropped by 44.6% between August 2008 and March 2010, a lot of which came on to the rental market in Fitzrovia. However, looking at the longer term though, tenants have had it good because since the turn of the Millennium, average wages have grown by 46%, but rents outside London have only grown by 45% over this period.

I told the landlord that there is a lack of new rental properties in Fitzrovia coming on the market, in fact according to the Office of National Statistics, there are only 84 new rental properties coming to the market each year in Fitzrovia but the population of Fitzrovia is rising by 168 people a year – something will have to give soon! This is compounded by the fact a number of landlords are looking to sell their rental properties in the coming months, as the property market in Fitzrovia has improved. This further compounded as tenants in existing rental properties appear to be staying in properties for longer periods of time.

Looking at the rents charged in Fitzrovia, historic evidence in the UK suggests private market rents have moved in line with general inflation. Government figures only go back as far as the year 2000, but looking at other countries with similar housing markets (America, Australia, Ireland and Holland) the fact is rents paid by tenants tend to rise in line or just ahead of inflation.

As short term wage growth in Fitzrovia has eased off recently, rising by only 1.3% in the last 12 months, taking average salaries in Fitzrovia to £38,325pa, with the tax breaks announced by The Chancellor in the Budget, I believe, even though rents have kept pace with inflation in the past, renting as an option has become more affordable, and is increasingly seen as a lifestyle choice. With returning economic growth and expected increases in the rate of growth of wages, above inflation rental growth could rise.

If you want a chat about the local Fitzrovia property market, pop in my office on Cleveland street for a coffee or email me on benjamin.draper@martinco.com

Bloomsbury 'Eye Candy property of the week'

This beautifully designed property on Guilford Street just off Woburn Place has just been completed to the market with Banbury Ball. It features one bedroom and a wonderful mix of original features and contemporary fittings. I don't expect it to be on the market for very long. Here's what the agents have to say about the property:

A boutique development of four interior designed apartments situated within this Grade II listed Georgian townhouse situated in the heart of Bloomsbury. This stunning one bedroom flat located on the first floor comprises entrance hallway with utility cupboard, large reception with an open plan kitchen, bedroom and bathroom. Sympathetically blending the best of Georgian features with more modern & contemporary features such as smoked & oiled Herringbone Oak floors & Porcelain Matt White Malmo Kitchens with Corian work surfaces and Tom Dixon lighting.

For more pictures and further information click on the Rightmove link.

http://www.rightmove.co.uk/property-for-sale/property-48607105.html

Great Buy To Let deal in NW1

Good morning property hunters, just getting back on the property band wagon to see what's out there that could potentially be a good buy to let option. 

This property has caught my eye, it's a 2 bedroom apartment on William Road NW1 near to Warren St tube station on the market with RIB. These flats always seem to rent really easily for quite decent rental amounts. I can see these flats achieving around £650 pw quite easily at the moment. When you compare this to the asking price of £899,950, you could be looking at an annual return of 3.77%. much better than what the banks are offering!

This is what the agents have to say about the property.

An extremely well presented two bedroom modern apartment located on the Sixth floor (Top) of this popular and centrally located building benefiting from a large balcony and Lift. For further details and pcitres click on the link below.

http://www.rightmove.co.uk/property-for-sale/property-49558138.html

I'm about most days in the office, so if you fancy popping in for a cuppa and a chat, come on down. My office is on Cleveland Street.