After the shock of the Conservatives returning to power with
a majority at Westminster, all the potential issues and possible uncertainties
of a hung parliament has lifted the cloud from the Fitzrovia property
market. Talking to other Fitzrovia
agents, surveyors and solicitors in the area over the last few days, there are
signs this has started a new impetus in the Fitzrovia property market after a
subdued six months, when an amalgamation of tougher lending conditions, a
natural correction after the strong recovery in Fitzrovia property prices in
2014, and political uncertainty ahead of the General Election slowed demand.
Against the back drop of Labour’s election promises of rent
controls and three year tenancies, some Fitzrovia buy to let landlords were waiting
to see how these new policies would be implemented before they committed
themselves to buying more property for their buy to let portfolio. Now that
uncertainty has been removed, the long term picture is very positive. So, with
all that uncertainty now removed, where next for the Fitzrovia property
market? Well with inflation at zero and
with the Money markets happy David Cameron is still at No.10, the Bank of
England have no reason to raise interest rates until 2016 at the earliest. As
mortgage rates are at their lowest levels since 2010, landlords with large
deposits will now be wooed by the mortgage companies in the coming
months with low rates.
You see over the past couple of years, Fitzrovia landlords
have benefitted from a booming Fitzrovia job market. Unemployment in City of London and Westminster Parliamentary Constituency has dropped
to 2.1%, as a year ago, 1,661 people were claiming unemployment
benefit compared to today’s 1,294. With
more jobs and better pay, as the level of rents is directly linked to tenant’s
wages, there has been an increase in the rental prices tenants are willing to
pay for good quality Fitzrovia properties.
Some landlords might be nervous about Tory’s plans for the
housing market over the next five years in terms of tenant demand for their
rental properties. One plan is for Housing Association tenants to have the
right to buy their property. These kind of tenants were never in the private
rented sector and will actually increase the supply of properties in the
housing stock in decades to come. The Government ‘Help to Buy Scheme’ has not
help to buy any properties in the Victoria / Kensington Palace/Fitzrovia
triangle since April 2013 (ie the City of London and Westminster Parliamentary Constituency.) . Considering 2,365 properties have changed hands in the last
year alone in the same area, I don’t think it has made any
difference to our local property market.
The biggest matter, when it comes to tenant demand of rental
property going forward, comes from the shift in the mindset and attitudes
towards renting itself. Twenty years ago you were seen as a second class
citizen if you rented a property. In Fitzrovia, as in the rest of London,
renting continues to offer good value for money for tenants. If you are an existing landlord in Fitzrovia
or thinking of becoming one (or as we like to call you .. a FTL .. a ‘first
time landlord’), then I must suggest you seek out specialist advice and
opinion. Like many agents in Fitzrovia, we will happily give you our opinion on
the current state of the market and the advantages/disadvantages to investing
in the Fitzrovia property market if you pop into our offices. However, if time is at a premium, another source of
information on the Fitzrovia Property Market is the Fitzrovia Property Blog Fitzroviapropertyblog.com
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