London Property Newsletter May 2016 - A Good time to sell?
Welcome to your May edition of the Fish Need Water newsletter!
Here’s what we’ve got coming up:
- Don’t get scared about selling!
- Landlords: now is the time to buy furniture… maybe
- All the latest need-to-know news.
- Top tool: Streetlife.
Is now a really bad time to sell?
After a property buying-and-selling frenzy in March, everything then went rather quiet. Buy-to-let investors had been busy trying to get all their deals through before stamp duty went up at the start of April, but now that stamp duty has increased, they’re all (we assume) sitting back, taking stock, and figuring out how to handle the situation.
So what does all this have to do with you?
Say you’d decided to put your property on the market at the start of the year: you’d no doubt have had interest from hoards of people – both potential homeowners and property investors. In this post-April world, though, there’s a good chance there’ll be far less demand from investors – leaving you with just the homeowners. Less demand means fewer opportunities for bidding wars and high sale prices. (This is more likely to be the case if you’re looking to sell a flat or small house that buy-to-let investors are usually most interested in.)
So what should you do – sit it out until landlords make some decisions? Or put it on the market and hope for the best?
The answer depends on a few important factors. Some properties and some areas, for example, will be almost completely immune from what’s going on in the life of landlords. It also depends on how soon you want to sell: remember that we have the annual summer slowdown coming up, and that really puts a dampener on the entire market.
Here’s what we recommend: talk it all through with a reputable agent and get some advice. We’d be more than happy to have an obligation-free chat with you, any time you like. Simply call 020 3199 3439 or pop in to our office.
Landlords: is it time to change the furniture?
In yet another government rule change, the wear and tear allowance has recently been replaced with a new system.
Previously, if you rented out a furnished home, you could claim tax relief on 10% of your rental profits for wear and tear (regardless of whether or not you’d improved the property’s furniture and fittings). Now, though, you’ll only be able to make a claim for the amount you’ve spent.
This new measure makes sense to us: it encourages landlords to keep their properties in good condition, because they can maximise their tax break for doing so. Under the old rules, they were able to take the 10% deduction and (if they wanted to) do absolutely nothing for it.
But before you go on a spending spree in Ikea, consider this first: now that the incentive to rent out furnished properties has been removed, should you perhaps be making life easier for yourself and renting out your properties unfurnished?
For the second time in one newsletter: the answer depends. Different areas and different types of property have different tenant demands when it comes to furnished vs unfurnished. A three-bedroom family home in North London, for example, is usually better off unfurnished: tenants are likely to be couples with children who already have their own sofas and beds to move in.
If you want our take on what you should do as a landlord, give us a call: 020 3199 3492. It doesn’t matter if you’re not a client of ours: we’ll still be more than happy to help!
Lots and lots of it:
London’s richest people went on a property buying frenzy just before April. Sales were up 16.2% compared to the first quarter last year, but – of course – everything’s going to slow down now that stamp duty has risen.
Ascott invests £52 million in prime London property. It’s not just London: they seem to be buying up everywhere.
Property developer will demolish her red-and-white striped Kensington house to build “dream London home” (and now the neighbours are REALLY mad). The headline almost says it all – but the photos in the article are worth a look.
Britain’s property market is going to implode as housing nears peak affordability. Lower and middle-income households are spending 26% of their salaries on housing today, compared to 18% back in 1995. In London, households spend 28% of their income on housing.
Our useful tool of the month
Streetlife is essentially Facebook for local communities: it puts you in touch with people in your surrounding area without the need to be accessible to the entire population of the world. It’s a great way to find out about local services, discover good tradespeople, and build links in your local area.
The end! (Until next month.)
Speak to you next month!