MANAGING PARTNER AT BLACK BRICK
Q.Dear Camilla. I’m thinking about buying a property in London for investment but I keep seeing various contradicting indices and I am very confused. What is happening?
A.There are so many indices and they often conflict – for example, the Halifax and Nationwide indices moved in opposite directions in July. This can cause confusion and more importantly, panic which is very unhelpful for the housing market. Our view at Black Brick is that it is impossible to have one index that accurately represents what is happening in the UK market. Indices such as Nationwide and Halifax are not a real reflection of what is happening in the prime central London market, which I think deserves its own index, given its popularity.
The London market is short on supply right now, particularly in the prime sought-after areas and between £500,000-£3m. The lack of supply is partly seasonal – August is typically quiet with few new properties coming on to the market. September should see an influx, which makes it a better time to start looking. While we don’t think the London market is totally immune to price drops, we don’t see prices crashing. It’s important to take a long-term view and look to hold the property for the next five to 10 years.
Q.Dear Camilla. I want to get my foot on the property ladder this year. Is now a good time? What steps do I need to take to be in the best position?
A.The rental market in prime central London is currently very strong, with a shortage of properties. According to Savills, rents went up some 2.4 per cent in the second quarter. So if you can afford to buy, it makes more sense to buy now rather than rent. And with rates so low, you should be able to get a good deal on your mortgage – we would recommend looking to fix for at least five years.
At the moment, most lenders will lend you around 70 per cent. Sort your financing before you start to look – get your lender to agree to lend you the money in principal. It also helps to have your solicitor in place. The London market is very competitive, so being a ready buyer, with financing and a lawyer in place, means you will be taken much more seriously and have a greater chance of securing the property. We always advise our clients to have all these things in place before starting a search.
Camilla Dell is the managing partner at search and acquisition consultancy Black Brick. www.black-brick.com.